Many blame bitcoin mining for the massive energy consumption and the impact on global warming and climate change. It might be true that bitcoin consumes nearly 1% of the energy produced in the world.
However, most of the energy that is used for bitcoin mining is from renewable sources that are difficult to be stored and those power plants are desperate to unload this surplus energy that they cannot sell. Here it comes bitcoin mining as a solution. Instead of being wasted the power plant can actually monetize this surplus electricity by mining bitcoin.
Renewable energy is often cheaper. Power plants based on renewable energy sources generally produce a fixed and large amount of electricity, while consumption in the region is variable. Consider, for example, hydroelectric power stations or wind turbines that produce electricity day and night, while there is a decrease in electricity during the day.
Renewable power plants therefore regularly face energy surpluses that they have to sell for lower prices. For the average consumer, for example, this can be reflected in different rates for peak and off-peak hours.
Cheap electricity is interesting for Bitcoin miners, because it allows them to increase their profit margin and remain competitive. Bitcoin mining is also interesting for energy producers, because miners buy energy surpluses that would otherwise yield little. Producers of (renewable) energy can therefore be more profitable.
In China where most of the bitcoin mining is concentrated the unsold wind energy was 17% in 2016 and the unsold solar energy was 50% in 2015-2015 according to Greenpeace report. To get an example of the energy wasted, only the unsold solar power in China could power an entire country like France.
In the past, China in particular was popular, but nowadays attention is increasingly focused on other parts of the world. The American state of Texas seems particularly popular at the moment. It is only a matter of time until every power plant that has surplus electricity to create a bitcoin mining farm.
Green power from Texas
Emotionally Texas oil state is perhaps not the most obvious place for energy from renewable sources. Yet Texas is the leader in America when it comes to generating electricity from wind energy. On some windy days, up to 40% of Texas power would be generated from wind energy. Although this percentage is lower on normal days, it is still around 20%.
That is significant. If Texas were an independent country, it would be the fourth-largest producer of wind energy in the world. The energy price in Texas is one of the lowest in the world. In addition, a great deal of oil and gas is extracted in Texas, with surpluses possibly being used to mine bitcoins.
Bitcoin mining growth
Although Texas seems to be very popular at the moment, the Bitcoin mining industry is growing elsewhere in the world as well. In addition, renewable energy is not always used, such as in New York where a power plant itself started mining bitcoins. We also reported earlier about the mining company in Russia owned by the country’s internet ombudsman plans to open a giant mining facility and take 20% of the global mining market.
China, on the other hand, seems to be increasingly out of favor with the miners. The business climate for miners seems to be less favorable due to strict regulations and government action. Many Chinese miners would therefore move to other parts of the world where there is also cheaper electricity, such as South America and Central Asia.
So if the look at the bitcoin mining more closely, not only it does not harm the environment, but it actually resolves the unsold energy problem that many power plants have.