Bloomberg’s Optimistic Take on Bitcoin Mining’s Green Energy Mix
A recent research note from Bloomberg Intelligence analyst Jamie Coutts suggests that the energy used by the Bitcoin mining industry is now over 50% green. Coutts based this conclusion on data showing a decline in Bitcoin’s carbon emissions since 2021, along with an increase in its hash rate. However, industry expert Daniel Batten argues that this claim is only partially correct.
Batten explains that the decline in emissions intensity, which refers to the amount of carbon dioxide emitted per unit of electricity consumed by the Bitcoin network, can be attributed to both a more sustainable energy mix and increased machine efficiency. Other factors contributing to the reduction in coal-powered Bitcoin usage include China’s mining ban, Kazakhstan’s loss of miners, and Marathon’s reduced mining activity in Montana.
Estimating Bitcoin’s Carbon Emissions
Estimating Bitcoin’s carbon emissions and overall power consumption is still an evolving field. Cambridge recently updated its Bitcoin Mining Index to account for the rising efficiency of ASIC machines, resulting in a 14% decrease in Bitcoin’s electricity consumption figures for 2021. Additionally, off-grid mining poses a challenge for measurement.
Batten attempts to consider off-grid miners in his estimates of Bitcoin’s energy mix and believes that more than 53% of the industry is powered by sustainable sources. He identifies four main factors contributing to the greening of Bitcoin: an increase in off-grid renewable miners, miners transitioning to sustainable sources, more mining utilizing the Texas grid, and a decrease in mining activities in Kazakhstan.
Hot Take: The Complexity of Bitcoin’s Green Energy Mix
The debate surrounding Bitcoin mining’s environmental impact continues as experts analyze its energy mix. While Bloomberg suggests that over 50% of the industry uses green energy, industry expert Daniel Batten argues that this claim overlooks the role of increased machine efficiency. Estimating Bitcoin’s carbon emissions remains a developing science, and the presence of off-grid mining further complicates measurements. However, Batten highlights the positive contributions of factors such as off-grid renewable miners, transitions to sustainable sources, and shifts in mining locations. As the industry evolves, achieving a truly sustainable energy mix for Bitcoin remains an ongoing challenge.
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