Bitcoin mining, its energy consumption and carbon footprint

Bitcoin mining is the process of verifying and adding transaction records to the public ledger known as the blockchain. Bitcoin, the first and most well-known cryptocurrency, relies on miners to validate and process transactions. In return for their service, miners are rewarded with newly minted bitcoins.

However, the cryptocurrency mining industry has come under fire in recent years for its high energy consumption and its use of non-renewable energy sources. As a result, events such as China banning crypto mining domestically occurred.

As the cryptocurrency mining industry continues to grow, it is important to consider the environmental impact of this industry. That’s why it’s important to look for ways to make Bitcoin mining more sustainable.

How has the Bitcoin mining industry responded to its bad reputation and which developments have taken place to reduce the carbon footprint?

Relocation of large Bitcoin mining farms to countries with renewable energy supplies

At the beginning of 2020, China was the world leader in Bitcoin mining. According to the Cambridge University Index, mining farms in China were responsible for over 71% of the total Bitcoin network’s processing power. Most of the energy consumption came from fossil fuels.

After the Chinese president announced China’s carbon-neutral goals, it didn’t take long for crypto mining to be banned in China. In May 2021, crypto mining farms began to leave China and relocate to countries with access to cheap electricity. These were countries with a large supply of renewable energy and an oversupply of electricity (e.g., the U.S., Russia, Canada, Georgia).

This relocation took place not only from China, but from many parts of the world.

Transitioning from fossil fuels to renewable energy sources

As mentioned above, there has been increased criticism of the Bitcoin mining industry’s energy usage. That’s because a large portion of the electricity used to power miners comes from non-renewable sources. This has led to concerns about the sustainability of Bitcoin mining, because the use of fossil fuels contributes to greenhouse gas emissions and climate change.

Both country climate regulations and reputational pressures have led to a shift in thinking within the crypto mining industry. Many large mining companies have established their own zero carbon footprint strategies and climate change mitigation plans. One of the most important steps is to switch from using fossil fuels to renewable energy sources.  Renewable energy sources such as hydropower, solar energy, wind energy and geothermal energy are primarily used today in Bitcoin mining.

Development and use of new mining technologies

To stay competitive, the Bitcoin mining industry is constantly evolving, with new technologies being developed. Competitiveness also includes having a good reputation in the industry by leading the way in reducing environmental impact. More and more investors and customers attach great importance to this attribute.

One of the newer technologies to reduce the carbon footprint of Bitcoin mining is immersion cooling.

Immersion cooling is a method of cooling electronic equipment using a liquid coolant. The equipment is submerged in the coolant, which removes heat from the equipment and dissipates it into the surrounding air. The liquid is usually a non-conductive material, such as mineral oil. This liquid is placed around the ASIC chips, in order to keep them cool.

Immersion cooling is becoming increasingly popular in the Bitcoin mining industry as a way to reduce carbon emissions. By using immersion cooling, miners can reduce their energy consumption by up to 40%. This not only reduces the miner’s carbon footprint, but also saves on electricity costs.

Bitmain, one of the world’s leading ASIC Miner manufacturers, has recently launched the Antminer S19 Pro+ Hyd. This model marks the company’s first product to combine liquid cooling technology  with increased hashpower.

The specialized liquid can reduce heat, power consumption and noise polution. Furthermore, the technology prolongs the lifespan of the machines and allowing miners to maximize profit. Whereas in conventional immersion-cooled operations the complete ASIC miners are placed in a vessel containing liquid, with the S19 Hydro there are cables that allow the liquid to flow through the machine.

Recycling of “heat waste”

Bitcoin mining is an energy intensive industry. Accordingly, miners emit large amounts of heat as a by-product of the computing process, which is usually discharged into the atmosphere.

Recently, several large Bitcoin mining companies have launched projects to recycle the „waste heat“ generated by their ASIC miners. The goal of heat recovery is to offset energy consumption and related carbon emissions. The biggest challenge here is finding effective ways to capture and transfer heat.

Current projects with a huge impact on „Green Mining“ are the following:

• MintGreen in Canada: Mine Bitcoin and provide zero carbon heating to a Whisky Distillery
• Genesis Mining Greenhouses: Use of special airflow systems that transfer the waste heat stream to a nearly located vegetables greenhouse
• Sato water boiler from Wisemining in France – Using ASIC-Miners for the heat production of water boilers for homes

Zero-carbon footprint targets with Green Mining

The Bitcoin industry is also following the trend of recent years to reduce its environmental impact. Like many countries and other industries, the Bitcoin mining industry is actively working to develop and implement practices to reduce its environmental impact. In this context, the largest Bitcoin mining companies have committed to a zero carbon footprint by 2030. Furthermore, the goal of the „Crypto Climate Accord“ (CCA) is to decarbonize the entire crypto sector by 2040.

The best way to achieve environmental goals in the crypto mining industry is through „Green Mining“. Green Mining is the practice of mining cryptocurrencies in a way that minimizes the environmental impact. This can be achieved in a variety of ways, such as the methods mentioned above.

As a result, according to the Bitcoin Mining Council, the worldwide Bitcoin mining powered by renewable energy increased from 37% (Q1 2021) to 59% (Q4 2021). With these figures, global Bitcoin mining has the highest sustainable energy mix compared to any industry or country.

Conclusion

Although the targets are still a long way off, the Bitcoin mining industry is on the right track. It is the industry which is reducing its negative carbon footprint the fastest. 

Any industry using non-renewable energy sources has a negative impact on our environment. In its current state, Bitcoin mining is no longer a natural disaster.

With the new „Green Mining“ trend, and the sector’s goals to reduce its carbon footprint, there is much hope for a greener future. If the waste recycling projects are successful, Bitcoin mining will even have a positive impact on other industries as well.

It is worth mentioning that we at Munich International Mining LLC also use only 100% renewable energy from hydropower.

What is your opinion: is the Bitcoin mining sector doing enough to counteract its negative impact on the environment? Or is the mining sector being deservedly criticized?