Bitcoin Mining Facts & Myths
There are many myths and misconceptions about cryptocurrency, Bitcoin, and mining. Bitfarms is committed to clearing any misconceptions and furthering education about the industry.
Bitcoin mining only accounts for 0.1-0.2% of the world's energy consumption.
Mining is the most efficient, cleanest industrial user of electricity, and is improving its energy efficiency at the fastest rate of any other major industry. No other industry comes close (consider planes, trains, automobiles, healthcare, banking, construction, precious metals, etc.)
The Bitcoin network continues to become more energy efficient because of the relentless improvement in the semiconductors (SHA-256 ASICs) that power the bitcoin mining centers. When combined with the halving of bitcoin mining rewards every four years that is built into the protocol, this results in a consistent 18-36% improvement year after year in energy efficiency.
Actually, conservative estimates on Bitcoins emissions are a fraction of a percent. The majority of mining is powered by excess renewable energy and subject to a curtailment program, whereby they only utilize otherwise unwanted load on the grid and make that load available in times of peak demand. The drive to excess renewables and curtailment programs are a primary target of Bitcoin miners and their market share is growing. A number of companies are also using flared gas, where Bitcoin mining is functioning as an economic incentive to reduce emissions without a public subsidy. Large public companies like Exxon, Crusue, Cleanspark and others are ramping up efforts which will result in real, measurable and meaningful reduction in emissions.
Bitcoin miners are largely location agnostic and are free to seek the most cost-effective sources of energy globally. This guides mining companies to turn to remote renewable sources that sustainably produce power disconnected from public demand. This underutilization of the energy is necessary in order for power to be cost competitive.
A majority of miners' hashrate is powered by sustainable energy with many real world examples relying on sustainable sources entirely. Metrics show almost 60% of energy for Bitcoin mining comes from sustainable sources. As the cost of natural gas increases, and the relative cost of green energy lowers, more and more mining companies are incentivized to make the switch to sustainable energy sources such as hydropower, solar power, and nuclear energy.
Many bitcoin mining companies, like Bitfarms, are taking a proactive approach to reducing energy waste. Some clean energy sources, such as hydropower, generate electricity at all times, regardless of whether or not it is being used. Many companies will only utilize power when there's no other use for it. For example, several of Bitfarms' Quebec farms only use excess energy and do not consume electricity during "peak hours" for energy consumption, such as in the morning and in the evening after traditional work hours.