Bitcoin, the world’s most valuable cryptocurrency, is going green, and the network’s pace of reducing its carbon emissions over the past three years has been noted by climate activists. However, how this will affect BTC prices and attract technology companies like Tesla, the electric car manufacturer, is yet to be seen.
Carbon Emission Along with Bitcoin Miners Rapidly Falling
In late May, on-chain data from Woonomic IMPARTED of Daniel Batten, a climate technology investor, and activist, noted that the amount of Carbon emission associated with Bitcoin mining fell by nearly 50% from 601g/kWh to 299g/kWh within three short year.
It should be observed that the Bitcoin hash rate and prices are continuously increasing during this period. In the last quarter of 2021, the price of Bitcoin soared to $69,000 before collapsing to below $16,000 in November 2022. Although prices have since recovered, soaring to $31,000 in April 2023, the hash rate has continued to rise to over the years.
In proof-of-work networks like Bitcoin and Litecoin, the hash rate relays the computing power dedicated to the network in real time. This is a variable that makes the network safe and robust against third-party attacks, and can also be used to measure the flow of where the Bitcoin platform uses energy.
Miners channel computing power as “hash rate” to secure the Bitcoin network. They need it to verify transactions in exchange for network rewards. The higher the hash rate, the higher the chance of getting a block and, thus, the 6.25 BTC every 10 minutes.
However, the tough competition for block rewards is partly blamed on environmental degradation and carbon emissions from miners. To remain competitive, Bitcoin miners must operate with energy-efficient equipment. Critics often maintain that the electricity that powers them comes from coal and other non-renewable sources.
As of June 2, the Bitcoin Energy Consumption Index SHOWS which is 105.23 TWh power Bitcoin. This is the same amount of electricity used in Kazakhstan. The resulting Carbon emission, they added, is at 58.69 Mt CO2, comparable to the emission of Libya.
However, data from the Bitcoin Mining Counsel, a group made up of some of the world’s largest BTC miners, provides more insight into the cryptocurrency’s energy consumption after conducting a study among its members:
(…) BMC (Bitcoin Mining Council) members and survey participants currently use electricity with a 63.8% sustainable electricity mix. Based on this data, the global bitcoin mining industry’s sustainable electricity mix increased slightly by 58.9% and remains one of the most sustainable industries worldwide.
Can Green Mining Support BTC Prices?
In that sense, Woonomic data is consistent with emissions falling significantly over the past three years. This has almost halved to 299g/kWh, suggesting that miners are switching to greener energy sources to power their rigs.
Technology companies are likely to consider adopting BTC as payment as carbon emissions fall. Earlier, Tesla rejected their decision to accept BTC for payment, citing the impact of Bitcoin mining on the environment. With the reduction of carbon emissions, this will positively affect BTC as major entities around the world will accept the coin and network.
Feature Image From Canva, Chart From TradingView
