Coinshares released an updated mining report showing that renewable energy sources power at least 77.6% of bitcoin mining operations. The finding contradicts widespread claims that bitcoin poses a sev
Coinshares released an updated mining report showing that renewable energy sources power at least 77.6% of bitcoin mining operations. The finding contradicts widespread claims that bitcoin poses a severe environmental threat.
The researchers focused on mining activity concentrated in China, where a 2017 Cambridge University study estimated 60% of global mining hardware is located, as well as operations growing in the Pacific Northwest. Beyond documenting the renewable energy mix, Coinshares suggested that miners' demand for cheap electricity could accelerate the buildout of renewable infrastructure.
Some observers claim bitcoin networks consume more electricity than entire countries. Others predict mining could eventually cause a two-degree temperature increase. Coinshares addresses both in its introduction: "Our view is that cryptocurrency mining—while costly—is doing little meaningful harm as far as the environment is concerned, and is also unlikely to do so in the foreseeable future," the firm writes. "We also believe the benefits of a global, censorship-resistant, highly transferable money with a rock-solid monetary policy behind it is worth that cost."
Between its May report and this update, the network's hashrate increased from 30 exahashes per second to 40 exahashes per second.
The researchers built their estimates from Cambridge University's 2017 finding that 60% of mining happens in China, along with various regional studies. Coinshares based its conclusions on estimates rather than confirmed data about miner locations and energy sources. Miners keep their identities secret, never revealing locations or operation sizes. Without this anonymity, governments could compel them to censor transactions, compromising Bitcoin's apolitical status.
Coinshares could not verify the exact energy source for every miner worldwide. The firm instead analyzed regional electricity mixes and cross-referenced them against publicly available data on energy curtailment. This approach, Coinshares states, "should offer insight into the most likely source of electricity supply for these miners by region."
Chinese miners concentrate in provinces with high renewable curtailment or large hydropower capacity. Miners settle in regions where electricity is abundant because energy costs are below 50% of operating expenses. "[C]learly not by chance," Coinshares notes, operations cluster precisely in the provinces where China's renewable generation is highest.
Sichuan province hosts an estimated 80% of China's mining operations and 48% of global mining. The region's energy mix is 90% renewable, meaning an estimated 43.2% of global mining operations run on clean power from Sichuan alone. Coinshares concludes: "[I]t would be reasonable to assume, given the impossibility of confirming on an individual miner basis, that the energy mix most miners face on the provincial wholesale market would be at least renewable to a similar extent."
