CoinShares, a UK-based crypto asset research, and investment firm may have just helped dispel one of the most scathing myths against Bitcoin adoption in its latest research. Released in the past week, CoinShares’ report entitled “The Bitcoin Mining Network—Trends, Marginal Creation Cost, Electricity Consumption & Sources” claims that contrary to popular belief, most energy used by Bitcoin miners is actually sourced from renewable sources of energy.
To be precise, the report said that as much as 77.6% of the energy used in mining Bitcoin is renewable.
In the report, CoinShares helps dispel the myth of Bitcoin mining being environmentally disastrous, a myth that was being propagated most notably (according to CoinShares) by researchers from the University of Hawaii’s Department of Geography and Environment. In fact, the report quotes a piece written by Camila Mora from the said university and published on the Nature.com website.
The piece managed to gain a lot traction even in traditional media for its negative sentiment it portrayed of Bitcoin, the leading cryptocurrency by market capitalization. Mora’s article claimed that Bitcoin mining activity alone could easily propel the world past the anti-pollution limits that were set during the 2015 Paris Agreement.
Well according to the CoinShares report this is entirely inaccurate. Looking at the methodology used by Mora to calculate the carbon footprint left by bitcoin miners, she took the figures from market stats on the average energy efficiency of standard mining equipment and used that figure to multiply it with the average CO2 emission rates of power production equipment in countries from which the miners of these blocks may have been located when they mined them.
While it is true that most of the mining takes place in China, it is entirely untrue to assume that the energy sources are non-renewable. According to CoinShares report, China may have actually embraced renewable sources of energy as far back as a decade ago.
The country has become so successful at producing renewable energy that its power greed has fallen short of the energy supply. This has led to what is called Curtailment – which is generally “the rejection of additional energy output due to the fear of overloading and shutting down an energy grid.”
The CoinShares report shows that more than 95% of the energy used by Bitcoin miners situated in China is sourced from renewable sources. This figure translates to about 48% of global mining. The report also reveals that close to 80% of all mining in China is done in a Chinese province of Sichuan which is part of the Curtailment efforts.
The rest of the 52% bitcoin mining operations are undertaken in areas around the northern hemisphere where the climate is cooler such as Iceland and Georgia. These regions are predominantly producers of renewable sources of energy.
In conclusion, the CoinShares report estimates that total global bitcoin mining that could be attributed to renewable sources of energy is about 77.6%. This report could offer some reprieve to Bitcoin that has been criticized by many critics of being the biggest contributor to global warming and general environmental degradation.