June 13, 2019
Earlier this month, CoinShares, a well-regarded crypto investment and research company from the United Kingdom, published a report on the current state of the global Bitcoin mining network. According to this document, as much as 74.1% of all mining capacities throughout the world are drawing power from renewable energy sources. At this rate, the mining of the dominant cryptocurrency turns out to be the most renewable-reliant, compared to other major industries that consume electricity in roughly the same quantities.
The calculations made by the group of researches were carried out on the basis of reasonable assumptions that a pool of miners in a given region consumes electricity drawn from the mix of energy sources which are reportedly present in the region. Such a mix usually consists of fossil fuels, for instance, coal and natural gas, nuclear power plants, and renewables like biomass, hydropower, wind & solar energy.
This data was then correlated with the total percentage of hashrate found in each administrative area of the chosen geographic region. Lastly, they multiplied the percentage of miners that operate in that area with the percentage ratio of renewable sources of energy present and actively used by different types of consumers.
The researchers specified that the largest portion of such energy come for the hydroelectric power stations, thus making them the dominant source of renewables, whereas a very small percentage of miners use solar energy to run their computation devices and rigs.
Having taken all these estimates into account, the authors of the report arrived at the conclusion that the percentage of renewables penetration in the worldwide mining industry amounted to 74.1%. These figures serve as exact evidence of the falsity of accusations that Bitcoin mining is immensely harmful to the environment and excessively drain the planet’s natural resources. However, they also represent a slight decrease in the utilization of renewables, by almost 4% from 77.8%, in comparison to the showings in their last report released in November of 2018. This can be explained by the improved accessibility of information about miners, which leads to data refinements, and such a phenomenon as the migration of miners.
For instance, CoinShares noticed a significant outflow of miners from Oregon, a region that has a lot of hydropower plants that run on the water from the Columbia River, counterbalanced by the inflow to such regions as Iran, where the power complex has traditionally been heavily reliant on fossil fuels.
Speaking of miners, CoinShares confirmed that this industry is dominated by China which harbors around 60% of the global crypto mining facilities. Interestingly, nearly half of the world's hashrate is concentrated in the province of Sichuan. This is explained by the fact that this region is characterized by the prolonged rainy season, an additional benefit for the multitude of hydroelectric plants present there. Thanks to these sources of renewable energy, Sichuan boasts probably the cheapest electricity prices in the world, which why explains miners find this region especially appealing.
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