Sustainable Bitcoin Mining
By Raphaël Wat, Analyst, Digital Asset Fund
Ever since Tesla stopped accepting Bitcoin payments in May 2021, citing environmental concerns, numerous critics have highlighted the high energy consumption of the blockchain network. They point out that the power required to secure the Bitcoin network exceeds the annual electricity consumption of some countries. However, recent market developments have created the opportunity to make Bitcoin mining sustainable.
Bitcoin miners can tap into any energy source, anytime, anywhere in the world. They are continually seeking low-cost energy, increasingly found in under-utilized renewable sources like hydro, wind, geothermal, and solar. Since these sources are dependent on natural conditions, windmills, solar panels, and dams often generate energy when it's not needed. This excess, unused energy is referred to as "stranded energy," and without a consumer, it goes to waste. Bitcoin miners can support the energy transition by using surplus renewable energy for their operations, thereby reducing waste. This involves adopting the "demand response" concept, utilizing excess energy that would otherwise be wasted to maintain balance in the energy system. Given Bitcoin's constant energy consumption, it could potentially create a marketplace for renewable energy. Its flexible demand could increase revenue for green power providers and stimulate more investment in clean energy.
Sustainable Bitcoin mining can help reduce methane emissions, which significantly contribute to climate change, accounting for 30% of total emissions. Bitcoin mining can use electricity produced from methane captured at landfills. This method both reduces carbon emissions and monetizes stranded energy by converting toxic fumes into digital gold. If this process can be scaled up, it could potentially revolutionize landfill operations. According to the environmental investment fund CH4 Capital, Bitcoin can pay off its climate debt faster than solar energy due to its potential to mitigate methane emissions. The fund suggests that investing in Bitcoin mining powered by vented landfill gas is 45 times more effective in reducing emissions per dollar invested compared to deploying solar infrastructure.
Other companies are adopting a similar approach, converting flared gas into electricity for Bitcoin mining. Producers often burn associated petroleum gas (APG) on-site in a process called gas flaring, as it is not always feasible to use it. However, Bitcoin miners can prevent gas flaring by converting APG into electricity, which benefits the environment. This method can decrease the amount of gas flared by each oil producer by 80%. It is the most cost-effective way to reduce emissions, surpassing wind and solar energy in efficiency. According to the Harvard Business Review, the potential energy from flared gas in the US and Canada could power the entire Bitcoin blockchain.
Initiatives such as preventing gas flaring and integrating it with other business activities aim to make Bitcoin mining eco-friendly in the long term. Recent research indicates that over 50% of Bitcoin's energy consumption now comes from renewable sources. Bitcoin has the potential to make methane reduction profitable for half the world's landfills, addressing a significant challenge in climate transition. The IRM Energy and Renewables Group (SIG) suggests that converting wasted methane emissions into electricity for Bitcoin mining could reduce global emissions by up to 8% by 2030.
In conclusion, although Bitcoin mining has been criticized for its high energy consumption, recent market developments have opened up possibilities for sustainable mining. Therefore, Bitcoin mining could become a substantial contributor to global efforts to reduce emissions.
🔦 White Star & Portfolio Spotlight
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🏦 Enterprises & Institutions
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⚖️ Government & Regulation
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💰 Funding & Exits
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Superstate raises $14M to expand into tokenized investment funds
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CFX Labs secures $9.5M to expand global remittance network on Solana blockchain
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Web3 K-pop agency Modhaus raises $8M in Series A round
South Korean blockchain-based K-pop startup Modhaus has raised $8 million in a Series A funding round led by U.S. venture capital firm Sfermion. The funds will support Modhaus in introducing more blockchain-based use cases in the Korean entertainment industry, particularly in K-pop, where fans can purchase NFT photocards to participate in decisions related to K-pop girl group tripleS.
🚀 Project Launches & Updates
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PancakeSwap launches gaming marketplace
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New York MoMA now has tokenized artworks in its permanent collection
The Museum of Modern Art (MoMA) in New York has made a historic move by acquiring its first tokenized artworks, including Refik Anadol's "Unsupervised — Machine Hallucinations" (2022) and an edition from Ian Cheng's "3FACE" project. These acquisitions mark MoMA's entry into the world of AI and NFTs, complementing its longstanding tradition of showcasing art and technology intersections. MoMA's embrace of digital art reflects its commitment to supporting artists experimenting with emerging technologies and their impact on the art world.
Paris Saint-Germain drops NFTs for Blvck Paris fashion collab
Paris Saint-Germain and Blvck Paris are teaming up to combine sports, fashion, and digital artistry. Fans can access their collection early through $50 NFTs on Crypto.com, with 10% being special editions redeemable for physical apparel. Paris Saint-Germain has also ventured into the crypto realm, introducing a fan token and distributing AI-generated NFT posters via Crypto.com, while star player Kylian Mbappé serves as a brand ambassador for NFT fantasy soccer game Sorare.
🔥 Other Bits We're Excited About
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