On September 14, Bloomberg crypto analyst Jamie Coutts made a thread at X (formerly Twitter) about the green energy’s share in Bitcoin mining. This analysis holds significance not only in terms of how eco-friendly Bitcoin is but also in the context of Elon Musk's promise made in the summer of 2021. Let's delve into the details.
Bitcoin mining analysis
Here are the main points from Jamie Coutts' research:
1) Since 2019, hashrate (depicted by the white curve) has quadrupled, while carbon emissions (illustrated in blue) have grown by only 6.9% over the same timeframe.
The analyst attributes this trend to China's ban on mining in the summer of 2021. Consequently, CO2 emissions have declined by 37.5% (indicated by the green arrow).
2) With a growing hashrate and decreasing carbon emissions, it suggests that the use of green sources for Bitcoin mining is growing.
Although it is impossible to know this reliably, the analyst estimates that the current share of green mining stands at around 53%.
3) Miners can help regions with monetising excess electricity.
As the analyst states, mining could potentially smooth the transition from coal-based energy to wind and solar power. A recent example is Kyrgyzstan, where the president ruled on mining at a large hydroelectric power plant.
4) The analyst’s conclusion is that Bitcoin mining may not be as bad for the environment as sometimes claimed by "international organisations such as the WEF, UN, BIS, and EU."
Bitcoin hashrate refers to the total computational power used for mining. It quantifies the number of hash computations that Bitcoin miners collectively perform every second across the network.
Elon Musk's promise
In March 2021, Elon Musk’s Tesla allowed customers to purchase their cars using Bitcoin as payment. However, later that year, the company removed the option. According to Elon Musk's announcement in June 2021, Tesla would consider accepting Bitcoin payments again when at least 50% of Bitcoin mining relied on clean energy.
Judging by Jamie Coutts' thread, the conditions for Musk’s promise appear to have been met. However, the billionaire has not yet commented on the news.
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