For most of Bitcoin’s short history, its mining process has remained an energy-intensive process. In the decade after it was launched, bitcoin mining was concentrated in China, a country that relies on fossil fuels like coal to produce a majority of its electricity.
Not surprisingly, bitcoin mining’s astronomical energy costs have drawn the attention of climate change activists who blame the activity for rising emissions. According to some estimates, the cryptocurrency’s mining process consumes as much electricity as entire countries. However, bitcoin proponents have released studies that claim that the cryptocurrency is powered largely by renewable energy sources.
One thing to remember about these studies is that they are based on conjecture and self-reported data from mining pools. For example, a CoinShares report from 2019 makes several assumptions regarding the power sources for miners included in their assessment of the bitcoin-mining ecosystem. A July 2021 map of bitcoin-mining locations by the Cambridge Centre for Alternative Finance uses data from four bitcoin-mining operators—BTC.com, PoolIn, ViaBTC, and foundry—but does not include statistics from AntPool.7 As such, it is difficult to accurately assess findings from these studies.
Yet, as the world moves toward renewable energy sources to power itself, bitcoin mining could also turn into a green industry and generate the majority of its power from renewable energy sources.