The rising energy usage by crypto miners has been facing increasing public scrutiny after Tesla CEO Elon Musk announced that the company would suspend Bitcoin payments until miners use 50% clean energy. Immediately, a new Bitcoin Mining Council was formed to promote energy usage transparency to encourage miners to use renewable sources.
Globally, miners in China account for about 71% of the current global hash power, with the United States and Russia accounting for about 7% each. The Cambridge’s Centre for Alternative Finance estimates the Bitcoin network’s current annualized electricity consumption totals about 145 TWh—distributed among all miners globally, accounting for about 0.65% of total global electricity consumption. (Smart Energy)
Crypto miners receive crypto as a reward for solving complex algorithms using proof of work (PoW). The higher the hash rate, the higher chance of receiving newly mined crypto. In reality, a substantial share of all proof of work (PoW) mining is already being powered by renewable energy. An Ark Investments analyst says 76% of Bitcoin miners are using renewable energy. Also, the Bitcoin Mining Network report from CoinShares Research estimated the share of renewables in Bitcoin PoW mining to be as high as 74%. (Smart Energy) These data tell us that cryptocurrency may actually speed up the transition to renewable energy.
“Crypto mining is all about maximizing the number of hashes (volume) per kW of electricity. Currently, the most efficient way to generate the highest hashes/kW is through the usage of solar energy and hydroelectric. Because those are the cheapest ways to produce electricity,” said Bitcoin expert Phil Geiger.
Furthermore, a new agreement inspired by the Paris Agreement, called the Crypto Climate Accord (CAA), has been launched to promote cryptocurrency decarbonization. The main objectives of the CAA are to reach net-zero emissions from electricity consumption by 2030 and to reach net-zero greenhouse gas emissions by 2040. So far, the agreement had collected over 40 signatories, including 20 prominent cryptocurrency companies.
With cryptocurrency companies coming together to reach net-zero greenhouse gas emissions, we are confident that businesses should continue to accept crypto payments. Cryptocurrency is a sustainable payment solution with our Bitcoin lightning network as it reduces energy consumption to just a tiny fraction of what it once was. Accepting cryptocurrency is the way to reducing cost and putting your business in line with sustainability; book a call with us now to find out more.