A fallacy exists that Bitcoin mining relies on coal-fired energy. While some areas of the world continue to rely on coal as a fuel source, many areas switched to hydro-electric, wind, or solar energy decades ago. This transition inherently means that most Bitcoin mining operations increasingly rely on renewable energy sources. Technology, like Bitcoin, can play a vast and unique helping role in providing green solutions.
How Much Electricity Comes from Coal?
According to Key World Energy Statistics, 40.4 percent of world electricity comes from coal-fueled power plants. While 27.2 percent of electricity does continue to come from plants using fossil fuels such as oil and natural gas, those produce cleaner energy than coal. Nuclear plants contribute 10.9 percent, hydro contributes 16.9 percent, and other renewable energies contribute the remaining five percent. Those include biomass, solar, and wind energy plants. Those straightforward statistics show that the majority of energy – about 60 percent – already comes from alternatives to coal. While most developed countries moved to renewables or cleaner sources like nuclear already, developing countries with large populations still use cheap coal. South Africa relies on coal for 94 percent of its electrical production, while China and India obtain between 70 to 75 percent of their electricity from coal, according to Energy Education.
Countries with the Most Bitcoin Miners
Countries with the largest number of Bitcoin miners are China, Georgia, United States, Canada and Iceland. While China does obtain the majority of its electricity from coal, Georgia, the US, Canada and Iceland generate the majority of theirs from other sources. Georgia uses hydroelectric for 81 percent of its electricity and natural gas for the other 19 percent. The United States produces its electricity using a combination of petroleum (25 percent), coal (22 percent), natural gas (22 percent), nuclear (8.4 percent), and renewable energy (8 percent). This means that only one of the countries noted for Bitcoin mining could be using coal as its main energy source. That said mining is known to be very popular during China’s wet season, indicating that most miners are already reliant on hydro.
So, how did the world come to believe that the majority of Bitcoin mining required or used coal-fired power? It is very likely a case of lagging education of a worldwide populace. How many people do you think to know the successful gains that renewable energies and alternative energies have made? The preconceived notion that Bitcoin miners use lots of coal-fired power simply comes from a misunderstanding predicated on outdated information. More than 98 percent of the world’s Bitcoin nodes are located in areas that use cleaner technologies for the majority or all of their energy production. While there are countries such as China and India that still rely heavily on coal, most of the Bitcoin ecosystem is not there.
Additionally, Bitcoin can allow people to use alternative energy sources and store the energy generated in bitcoins. This means that due to Bitcoin, we can now essentially export energy anywhere on the planet. Coal, which has been used as a central energy source for many years, is slowly emerging out from the global picture. Besides, coal-fired power plants are generally located in areas that already meet the demand for this energy. The opportunity with Bitcoin is to consolidate excess energy and energy that is not very mobile. This allows us to stabilize revenues from renewable energy. Mining facilities will generally be moved to the energy source, while companies have traditionally required that electricity be brought to their facilities. It’s another way Bitcoin mining will help the world get rid of its energy inefficiencies. Therefore, it makes sense that there is a significant shift toward renewable and energy-efficient energy sources.
Best Places for Bitcoin Mining
Of course, most existing Bitcoin operations sprang up naturally, located where the interested parties lived. As its popularity grew, companies developed and studied alternatives to natural locations. As a part of developing their business plans, they analyzed what areas best suit themselves to locating a mining operation.
A few obvious no’s include the countries which have illegalized Bitcoin: Algeria, Bangladesh, Bolivia, Cambodia, Colombia, China, Egypt, Ecuador, India, Indonesia, Iran, Jordan, Morocco, Nepal, Pakistan, Saudi Arabia, Taiwan, Thailand, United Arab Emirates (UAE), and Vietnam.
The ideal location for mining provides a naturally cool or cold environment with low-cost electricity provided by a renewable or cleaner energy source. It helps if the location already has appropriate buildings for lease or purchase. This cuts the cost of construction. Businesses look for buildings that already typify the design needed or that they can easily convert to their needs through simple remodeling.
Currently, Iceland, Venezuela, Canada, Georgia, Estonia, and Russia top the list of the best places to establish a Bitcoin mining operation. Each of these locations offers regions that experience very cold temperatures most of the year and affordable electricity rates. This cuts the operating costs of the company since they do not need to cool the servers, one of the largest costs of running any cryptocurrency mining operation. While they may seem out of the way, these countries provide significant advantages to other locations.
None of the countries on the preferred list use coal as their main power source. Most of the preferred countries use hydroelectric power or they have turned to renewables as a developmental source. The most popular of those is solar since it can be produced nearly everywhere. Certainly, Alaska would have trouble during certain times of the year, but solar typically provides an option for any location. Hydroelectric also provides a simple alternative popular in most developed countries. These countries serve as the growth hotspots for Bitcoin mining.
It is a myth that coal-fired electric plants power Bitcoin mining. The correlation between bitcoin mining and renewable energy would make bitcoin mining more “renewable” than almost any other major industry in the world. There is currently little evidence to suggest that Bitcoin directly contributes to climate change. Even assuming that Bitcoin mines were exclusively fueled by coal – a very unrealistic scenario given that a considerable number of factories operate solely from renewable sources – the total carbon dioxide emissions would not exceed 58 million tonnes of CO2, which corresponds to approximately 0.17% of total global emissions. This does not mean that environmental concerns regarding Bitcoin’s electricity consumption should be ignored. However, the current numbers need to be put into perspective: the available data shows that even in the worst case, Bitcoin’s environmental footprint remains marginal at best.