Bitcoin (BTC) mining consumes quite a bit of energy. It is the necessary evil to make bitcoin a secure and transparent network on which people can send transactions over the internet. As the discussion surrounding climate change develops, also the bitcoin mining community is doing its part in becoming more sustainable.
Bitcoin (BTC) mining and energy consumption
However, first of all, why is it that bitcoin miners use so much energy? The reason for the consumption is the underlying Bitcoin protocol. Miners need to find the solution to a complicated mathematical problem, and if they succeed, they receive bitcoin. Solving this problem comes down to encrypting transaction data into a string of characters, also called a hash key. This key needs to meet the requirements set by the Bitcoin protocol.
By changing only a small amount of information within the data that a miner encrypts, the miner generates an entirely different hash key every time they change this information. They keep doing this until they find a hash key that meets the requirements. Bitcoin miners do this so fast that they generate almost uncountable amounts of hash keys every second. The more they generate per second, the higher the chance they find the right key! So one can imagine that miners are continually trying to push the limits, meaning they use more and more energy.
Mining bitcoin the green way
Last year we already wrote in a blog post that green energy is gaining more ground in the bitcoin mining world. Research back then showed that the majority of bitcoin mining happens with sustainable energy. What is the reason that the share of green energy was already this big a year ago?
Green energy sources, such as hydro powerplants, wind energy, and water dams, cannot be turned off. During off-peak hours these energy suppliers have no one to sell their energy to. Bitcoin miners are eager to swoop in and consume that electricity as it is extra cheap at those moments.
Twitter CEO pumps money into faster transition to green energy
Twitter CEO Jack Dorsey’s Square, a payment company, recently announced that it will contribute to the transition. The company will invest $10 million to stimulate a faster transition to green energy. The company wrote in the announcement:
“Bitcoin is a unique part of Square’s footprint, as the company purchases the cryptocurrency on behalf of Cash App customers. The new Bitcoin Clean Energy Investment Initiative will support companies working on green energy technologies within bitcoin mining, and aims to accelerate its transition to clean power rather than only removing the carbon for the bitcoin that Square processes.”
Mining rig manufacturers, such as Bitmain, are also doing their part. The newest ASIC miners are becoming more efficient, leading to a lower energy consumption per generated hash key. Slowly but steadily, bitcoin mining is becoming greener!