The concept of utilizing renewable energy sources for Bitcoin mining has gained traction as a potential solution to address the environmental concerns associated with the energy-intensive nature of cryptocurrency mining. Bitcoin, a decentralized digital currency, relies on mining, where powerful computers solve complex mathematical puzzles to validate transactions and add new blocks to the blockchain. However, traditional mining operations, particularly those using fossil fuels, have raised concerns due to their significant carbon footprint and energy consumption. Integrating renewable energy sources, such as solar, wind, or hydropower, into Bitcoin mining aims to mitigate these environmental impacts by reducing greenhouse gas emissions and reliance on non-renewable resources.
Recently, Professor Hamed Afshari (from the Engineering Department at Islamic Azad University Central Tehran Branch, Tehran, Iran) and his team (professors and researchers from Pardis New City, Iran, University of Ontario Institute of Technology, Canada, and University of South-Eastern Norway (USN), Kongsberg, Norway) published a paper titled “Development a policy for the production of Bitcoins with renewable energy sources” in Future Energy Journal.
The research delves into the significance of Bitcoin as a decentralized digital currency that has captured global attention since its inception in 2008. Economists highlight Bitcoin’s potential to reduce global inflation, and its emergence has led to a proliferation of digital currencies, with its price growth over the past decade indicating the growth of this sector. Beyond its role as a form of money, Bitcoin has gained recognition as an investment tool and a store of value, often referred to as digital gold. However, a critical concern is the substantial energy consumption associated with Bitcoin mining, particularly when powered by non-renewable energy sources. This energy reliance not only contributes to air pollutants but also exacerbates greenhouse gas emissions and climate change.
The research addresses this issue by proposing four scenarios for Bitcoin production using electricity generated from non-renewable sources, including coal-fired and natural gas-fired power plants. It analyzes the amount of electricity required to produce a single Bitcoin and calculates the corresponding pollutant emissions and social costs. These additional costs must be considered alongside the base cost of Bitcoin production when non-renewable energy sources are employed. The study emphasizes the potential of using renewable energy sources for Bitcoin production to mitigate the aforementioned problems while also offering income-generating opportunities, especially in low-cost electricity regions and developing countries. Based on electricity prices across different countries and regions, the research presents a strategy to determine the cost-effective price of Bitcoin production, accounting for the cost of electricity (to read more, download this open-access paper).
The idea of powering Bitcoin mining with renewable energy sources holds promise as a way to make cryptocurrency mining more environmentally friendly and sustainable. By utilizing clean energy to offset the energy demands of mining operations, it may be possible to reduce carbon emissions and contribute to the global transition to a greener energy landscape. However, the successful implementation of this concept requires addressing technical, logistical, and economic challenges to ensure the reliable integration of renewable energy into the cryptocurrency mining ecosystem.
Writing by Alireza Sabet; Editing by Sarah White