Last Updated: January 18, 2022
What started as a task done by a “regular” computer has now grown into a complex process that uses special computer equipment requiring insane amounts of energy to function. Of course, we’re talking about bitcoin mining.
After another huge spike in the cryptocurrency’s value, bitcoin trading is running rampant. However, to obtain precious bitcoins, a lot of mining needs to be done. However, it has gotten to a point where our energy sources simply can’t keep up with the computing power required to mine cryptocurrency, especially bitcoin.
As a result of this, bitcoin (and other cryptocurrencies) is notoriously known for being a huge carbon emission propeller. However, the CEO of electric vehicle and clean energy company Tesla and social networking service Twitter—Elon Musk and Jack Dorsey, respectively—seem to have an optimistic stance about bitcoin having a green future i.e. relying mostly on renewable energy.
Reality or Greenwashing?
However, their outlook didn’t sit right with everyone. Many accused Musk and Dorsey of ”greenwashing” this huge source of money.
The reality is that bitcoin’s carbon footprint can be compared to that of whole cities and even countries, and the situation seems to be the worst in China. Using cheaper energy is a no-brainer for many miners, and many of them resort to the cheapest source possible—coal.
Currently, China is the country that produces most bitcoins. This is because two-thirds of its energy is powered by coal. China has been aiming towards decreasing its dependence on coal and turning towards renewable energy sources, but bitcoin mining efforts are setting it back, causing it to miss its climate change targets.
Dorsey stated that he believes the problem can be solved if bitcoin miners and renewable energy firms work together. In a paper, called “Bitcoin is key to an abundant, clean energy future,” by his firm Square, it was stated that “by combining miners with renewables and storage projects, we believe it could improve the returns for project investors and developers, moving more solar and wind projects into profitable territory.”
Dorsey also contributed to the conversation in a tweet posted last Wednesday, where he said “#bitcoin incentivizes renewable energy” and received a reply from Musk—“True.” However, a quick scan through the replies shows that most people disagree with him.
What Does Iceland’s Example Tell Us?
That said, focusing on renewable sources for bitcoin mining isn’t impossible. Countries such as Iceland and Norway have proved this by reducing the carbon footprint of bitcoin almost to zero by using renewable energy. This is made possible through hydroelectricity and geothermal energy. However, the energy used in these countries is almost 100% renewable anyway; they just found a way to use it for bitcoin mining as well.
As mentioned before, many countries are already striving towards renewable energy, however, what they need to do is to increase their efforts to catch up with the growing energy demand not only for cryptocurrency but other businesses as well.