“This year, I bet we will have an 85% green bitcoin”: can mining be green?

While bitcoin is energy-intensive, so-called “green” mining farms have sprung up like mushrooms in the space of a few years.

Each new bitcoin released on the blockchain has an additional impact on the planet. Bitcoins are created in places called “mining farms” using the computing power of many machines and computers. However, running all these machines requires a lot of electricity. According to figures from the Cambridge Bitcoin Electricity Networkbitcoin would represent 23% of the electricity consumption of data centers, or approximately 153 terawatt-hours per year.

58% of miners use renewable energy

Faced with this observation, more and more mining farms, accused of being very polluting, are turning to green energies. More and more of them are emerging, like the Marathon Digital Holdings, or the Nantes-based company BigBlock Datacenter. According to Bitcoin Mining Council data, a council of bitcoin miners, 58.4% of miners would use a renewable energy mix in 2022, although there are differences between some countries and some companies. According to the report, 44 companies in the sector, which accounts for 50% of total production, are increasingly using green energy to mine cryptocurrencies.

“This clearly puts bitcoin in an even stronger position than before in its status as a new store of value compared to gold”, explains to BFM Crypto Julien Maldonato, partner at Deloitte, in charge of the financial industry.

For the latter, it is “crucial” that the bitcoin mining sector continues its migration to green energy.

“It was the first criticism that we made of bitcoin, of being energy-intensive, if it makes it possible to transform green energy which cannot be stored (and which therefore would have been lost) towards an ever more efficient security of transactions. then bitcoin is a virtuous system,” he adds.

A trend that should increase

This trend towards green mining could intensify in the coming months. On the one hand, we observe the interest of big players in this subject, Telsa, for example, plans to develop a bitcoin mining farm powered by solar energy. Moreover, some countries want to encourage companies to engage in green mining, like El Salvador or even more recently Uzbekistan, which has just published a decree that will exempt miners using green energy from taxes.

Another factor that can accelerate this trend: the economic context. “The transition to green is made because of the price of hydrocarbons, which disqualify players who are on coal, this precipitates the game. This year, I bet we will have an 85% green bitcoin”, explains to BFM Crypto Sébastien Gouspillou, boss of the green mining company BigBlock Datacenter, created in 2017. “For us, every miner who goes on coal is just stupid”, he slips. The company, whose mining farms are in Kazakhstan and Congo, is expected to be at 6-7 sites by the end of the year.

His company is also preparing to work with the Central African Republic, which has just accepted bitcoin as legal tender, by conferring utility on green mining to finance the country’s projects.

“We want to help them in their hydroelectric projects. The idea is to set up a ‘bitcoin bond’ in the Central African Republic to offer the community to buy tokens to finance the country’s hydroelectricity, the profitability will be supported by green mining. For an investor, there is less risk in financing a power plant with mining,” he explains.

Are mining farms green?

Faced with the rise of all these green initiatives, a question may arise: are green mining farms all green?

“The mining farms are not yet well audited to know if they are really powered by green energy. This is because it is still a very recent phenomenon where the historically Chinese mining farms and powered by fossil fuels have taken advantage of an exile from China to relocate next to green energy sources. For these new mining businesses, making false announcements would be catastrophic”, considers Julien Maldonato.

For its part, BigBlock Datacenter is also concerned about recycling mining machines. Indeed, mining farms face a lot of electronic waste (graphics cards, computers…) as revealed by a study of the Resources, Conservation, and Recycling. “Our oldest machines will be 6 years old, for the moment they are holding up. On the other hand, we store all the carcasses of dead machines and we will send them for sorting in South Africa”, specifies Sébastien Gouspillou.

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“This year, I bet we will have an 85% green bitcoin”: can mining be green?

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