A study by Cambridge Centre for Alternative Finance (CCFAF) shows that 39% of Bitcoin and other proof-of-work cryptocurrency assets run on clean energy. This presents an increase from 28% recorded in the previous study from 2018.
The ‘3rd Global Cryptoasset Benchmarking Study’ shows signs of a more positive future for the cryptocurrency industry and its environmental footprint.
“The survey findings estimate that on average 39% of proof-of-work mining is powered by renewable energy, primarily hydroelectric energy. Understanding the energy source of mining is important because electricity costs account for the majority of hashers’ operational expenditures – albeit with some variability across world regions – and hashers have long competed on accessing the cheapest energy source”
Renewable energy serves to provide cheaper alternatives to fueling mining operations. Rising competition and tight profit margins have led miners to seek more sophisticated technology to increase productivity, including green tech.
The majority of miners (76%) use renewable energy as part of their energy mix. Hydropower is considered to be the number one source of energy, with 62% of surveyed miners running on hydroelectric energy. Other types of clean energies such as wind and solar also constituted a significant proportion of the energy used by miners who used clean energy.
“The data does not allow us to infer what share of natural gas usage corresponds to stranded gas, i.e. represents energy that would otherwise be wasted or unused. Stranded gas either takes the form of gas that would be flared at oil or gas wells due to limited pipeline capacity or gas coming from non-exploited wells due to logistical or economic reasons.”
Significant concerns have been raised over the years about the ecological footprint of blockchain networks such as Bitcoin. Fortunately, service providers (including miners) in the blockchain industry have incentives to use green energy to save costs of operations. This is especially true in African regions where solar energy has gained popularity.