According to a new report by CoinShares, Bitcoin Mining not only uses electricity predominantly from renewable sources, but also acts as a promoter of clean electricity in certain regions. What is behind the thesis?
Bitcoin Mining doesn’t have a very good reputation. Critics of the No. 1 crypto currency all too often refer to the immense amount of power used for the proof-of-work algorithm (PoW), i.e. the security of the decentralized network. For such a volatile speculation object, the argument goes, the annual energy expenditure is out of all proportion.
The new CoinShare study on the status quo of Bitcoin mining paints a diametrically opposed picture of the situation. In “The Bitcoin Mining Network – Trends, Marginal Creation Cost, Electricity & Sources” the authors come to the conclusion that the data situation does not permit any other interpretation than that at least 77.6 percent of the electricity for Bitcoin Mining comes from renewable energies. Better still, through Bitcoin’s constant energy demand, the network siphons off excess energy reserves and thus stabilizes the power grids. This in turn even has a positive effect on the efficiency of electricity grids and promotes renewable energies.
An overview of the Bitcoin news
First, the authors of the Bitcoin news deal with the advantages of PoW. The Bitcoin news authors counter the critical attitude of many PoW opponents by stating that PoW algorithms are the safest of all consensus algorithms. Every network participant can participate in the verification of transactions by operating a full node and thus independently verify the network integrity.
Bitcoin Mining is therefore not a “senseless waste of energy”, but rather a necessary process for maintaining the network.
“We also believe in the advantages of a global, censorship-resistant, highly liquid currency with a sound monetary policy. In view of this, the costs are worth it.”
Profitability of Bitcoin formula
As BTC-ECHO reported, the Bitcoin formula miners currently have a hard time. Read more about it: https://www.forexaktuell.com/en/bitcoin-formula-scam/ A rising hash rate is countered by falling prices. This toxic combination is driving many players out of the market. However, according to the authors, profitable mining is still possible. You just have to know where. The report cites the Sichuan region in China as an example. Low temperatures and low electricity costs make for ideal conditions for Bitcoin mining.
Something new in the West
However, the trend is away from Chinese concentration. According to this, large mining farms are currently investing less in China than in countries such as the USA, Canada and Russia. Because there are often better conditions (faster Internet, lower temperatures, better regulation). According to the study, only 60 percent of the hash rate remains in the Middle Kingdom.