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Bitcoin Mining Passes 50% Sustainable Energy Threshold
Estimates suggest around 53% of electricity used to mine BTC is sustainably generated, with an upwards trend.
Bitcoin has never had a good environmental reputation. As soon as it was large enough to attract interest, the network was already consuming vast amounts of energy, thanks to the specialized mining rigs required to compete successfully to find the next block.
Alongside other criticisms (such as its use as a currency for the darkweb, volatility, and means of facilitating fraud and crime), Bitcoin’s environmental credentials made it an easy target. In 2022, one analysis found that Bitcoin's proof-of-work mining consumed around 150 terawatt-hours of electricity every year: More than Argentina, which has a population of 45 million.
The Musk Effect
Back in February 2021, Elon Musk announced that Tesla had bought $1.5 billion in BTC. It was a time of incredible excitement, as the bull run was taking off, and Microstrategy had paved the way by advertising its use of BTC as a way of hedging against inflation. Tesla's investment helped push BTC over $50,000.
However, Bitcoin's dirty reputation quickly came back to bite Musk, who was ridiculed for investing funds from a company launched to build environmentally friendly electric cars to buy a crypto with such a high carbon footprint. Musk reacted by halting crypto payments for Teslas, stating he would only restart them when the Bitcoin network was powered by at least 50% clean energy.
The Bitcoin mining industry has taken these criticisms to heart. Over the last two years, mining has steadily transitioned to greener power (helped by China, which generates a lot of electricity from coal, banning mining). Now, it appears that Bitcoin has met Musk's informal threshold. Bloomberg Analyst Jamie Coutts recently noted the changes that have taken place in Bitcoin's energy use since June 2021.
Estimating mining energy usage accurately is not easy, since a certain amount happens privately—that is, by rigs that are not part of a pool, and that do not show up in any public information. (It's a little like mining gold in your own back garden.) Still, there's enough data for a clear picture to emerge.
The most reliable estimates suggest that well over 50% of electricity used to mine Bitcoin is now generated from sustainable sources—likely around 53%.
Tesla still holds almost 11,000 BTC from its original purchase. Now, we wait to find out whether Elon will restart BTC payments.
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