Can renewable energy save Bitcoin’s reputation?
There were a handful of events that helped Bitcoin (BTC 3.55%) ran to nearly $ 70,000 last year. Some of the highlights from 2021 that drove it to new heights included Elon Musk who publicly supported Bitcoin, Tesla announced that they would accept Bitcoin as payment, the SEC which approves a Bitcoin futures ETF on the Chicago Mercantile Exchange, and the country El Salvador which makes it a means of payment.
However, the whole of 2021 was not sunshine and rainbows for the world’s most valuable cryptocurrency.
Bitcoin struggled when the Chinese government announced that financial institutions were banned from offering any kind of crypto-related product in May 2021. The prospects for future regulation also sent fears across the market when SEC Chairman Gary Gensler postulated that investor protection laws should apply to crypto. exchange as well.
Undoubtedly the worst incident related to Bitcoin in 2021 came when Bitcoin supporter himself, Elon Musk, announced on Twitter that Tesla would stop making payments in Bitcoin due to the impact Bitcoin mining has on the environment. The day Musk tweeted it, Bitcoin fell 13% in a matter of hours.
Since Musk’s tweet, the stories about China, US government regulation and general speculation have seemed to disappear from the public eye. But the environmental concerns surrounding Bitcoin mining are the only thing it can not completely shrug off.
A new time
Fast forward almost a year, and it’s starting to look like the history of Bitcoin mining may start to change. And that may be just enough to pull Bitcoin out of recent breaks.
Bitcoin miners and energy companies around the world have spearheaded this problem. Many Bitcoin miners choose cleaner energy sources because of their increasing abundance, cheaper costs (resulting in greater profits) and overall goals of minimizing carbon footprints.
Some of the most important landmarks towards the coveted goal of clean energy have been reached just this year.
Aspen Creek Digital, a Bitcoin mining company, recently launched a 10 megawatt solar farm in western Colorado. For context, it is assumed that 1 megawatt is capable of operating 267 Bitcoin miners.
The company also has plans for a similar website in Texas that will be up and running sometime this summer. Solar panels on these farms will provide all the energy needed to extract Bitcoin without pollution.
The project has even attracted crypto evangelist Mike Novogratz and his company, Galaxy Digital (TSX: GLXY)to set up their own miners on site.
This is just one example of a trend that seems to be growing among miners when they want to cut costs and stay profitable. Other Bitcoin mining companies are coming to the realization that renewable energy is the future.
One of the most innovative Bitcoin mining operations is led by the Houston-based technology company Lancium. The company operates two data centers in West Texas that use solar and wind to operate their Bitcoin mining operations. What stands out from Lancium’s operations is that it is connected to the state’s electrical network.
These centers, known as “Clean Campuses”, fill a much-needed gap in Texas’ electrical network. Texas has an abundance of solar and wind power, so much so that there is often not enough demand to meet supply. This imbalance can cause instability throughout the grid. To stabilize the network, there must be a buyer when supply is high and demand is low.
Lanciums Clean Campus offers a viable and profitable solution to this problem. When energy needs are low, miners use the unused energy. However, when demand is high, Lancium miners can “disconnect” and allow other users of the electricity grid to harness the stored renewable energy.
The company hopes to expand its capacity to more than 2,000 megawatts in the years to come.
Turns green
A December 2021 report from the Bitcoin Mining Council estimated that almost 59% of Bitcoin mining operations were supported by renewable energy sources. This figure was almost 75% before the mass exodus of hydropower-powered Bitcoin miners banned from China in 2021.
Bitcoin is becoming a greener technology. There is no doubt that it uses a significant amount of energy, but current trends point to a future where Bitcoin uses clean, renewable energy sources.
If the narrative around Bitcoin’s energy consumption can change, and especially if Elon Musk can share these positive developments as he does the negative ones, it may be enough to put an end to the Bitcoin discourse on energy use.
