3 months ago

    Pioneering Sustainable Bitcoin Mining: The potential of Green Energy

    Table of contents

      Our research and on-ground experiences have led us to identify hydropower as a highly efficient and sustainable energy source for mining operations. Countries like Norway and Ethiopia present unique opportunities with their abundant hydropower resources. In Norway, despite the challenges of government regulations, the availability of clean, renewable energy makes it a favorable location for mining. Similarly, Ethiopia’s vast hydropower capacity and competitive energy pricing offer a promising landscape for sustainable Bitcoin mining.

      Shifting dynamics in global bitcoin mining

      Figure 1 Bitcoin Mining November 2023

      The United States has emerged as a dominant force in Bitcoin mining, now holding 40% of the global hash rate. This marks a significant change from previous years, with China’s share reducing to 15%. Russia maintains a considerable presence with 12%. These figures underline a major geopolitical shift in Bitcoin mining, demonstrating the increasing influence and strategic positioning of the United States in this rapidly evolving digital economy.

      Navigating political and economic landscapes

      While exploring new territories for mining, it’s crucial to understand and navigate the local political and economic landscapes. Ethiopia, for instance, poses certain political risks, but these are offset by the low cost of operations and the abundance of renewable energy. In contrast, countries like the United States (40% of hash rate) present different challenges, with higher operational costs and varying state regulations. Another big player is now Russia, which contributes about 12% to the global hash rate. This figure is split between Siberia, which accounts for 9% and relies predominantly on hydropower, and the European part of Russia, contributing 3%, where mining is more dependent on natural gas.

      Looking ahead: sustainability and scalability

      As we look to the future, the sustainability of Bitcoin mining remains a top priority. The industry must continue to innovate and leverage renewable energy sources to ensure long-term viability. Additionally, scalability is critical. Expanding operations into new regions with abundant renewable resources can increase our mining capacity and contribute positively to the global shift toward sustainable energy practices.

      The journey of MinerMetrics highlights the potential of sustainable Bitcoin mining. We set a new industry standard by tapping into renewable energy sources and navigating complex geopolitical landscapes. The future of Bitcoin mining lies in harmonizing economic viability with environmental responsibility, and at MinerMetrics, we are committed to leading this charge.

      The role played by solar and wind in bitcoin mining

      The Bitcoin hash rate just reached an all-time high, with miners adding more computational power to boost the network’s security and efficiency. Although criticized heavily for its energy consumption of 0.21% of total global energy production, Bitcoin mining revenue is emerging as crucial in defining a profitable renewable infrastructure, aiding project financing, and scaling the energy grid

      Figure 2 Bitcoin network hashrate

      As of the first quarter of 2023, the Bitcoin mining industry used a sustainable electricity mix of 59.9%, showcasing an increase in sustainable energy usage by 1% over the previous year​​. 

      Decentralization and remote power generation

       Much of Bitcoin’s hashing power comes from remote regions rich in renewable energy, mainly hydroelectric. These regions have the potential to generate and distribute renewable energy, which might not be marketable due to the lack of local demand. However, the dependence on hydropower raises concerns about its sustainability, especially considering the variable nature of water resources due to climate change.

      The shift towards renewable energy sources is critical for Bitcoin mining’s sustainability, especially considering the exponential growth in solar energy, which is projected to see a cost reduction of 15% to 35% by 2025​​, and the expansion of wind power, one of the cheapest renewable sources​​.

      Energy storage and grid stability 

      With the increase in renewable energy, some advocate for storage as being a solution. However, the increasing cost and limited availability of battery storage pose challenges to managing the intermittent availability of renewable energy sources. Bitcoin mining offers a complementary clean energy production and storage technology due to its flexible and interruptible load capabilities. It can utilize renewable energy that might otherwise be wasted due to grid congestion, thereby promoting the construction of more solar and wind power infrastructure.

      Figure 3 Cobalt and lithium prices

      Future demand and supply dynamics

      The demand for renewable energy will increase global supplies by 50% over the next five years​​. This expansion is vital for Bitcoin mining, which can serve as a driver for more renewable sources. Its inherent nature as location-agnostic and the ability to provide flexible demand makes it a suitable “energy buyer of last resort”, capable of adapting to intermittent renewable sources like solar and wind.

      Read Next: Renewable Energy Performance Index 2023


      Minter Metrics
      Minter Metrics
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