Sustainable Crypto Mining Practices Might Be Shifting from Luxury to Necessity – What Does This Mean for the Future of Cryptocurrency?

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In September 2021, China confirmed its ban on cryptocurrency, and the world is still dealing with the consequences.

In what has been labeled the “Great Mining Migration,” hundreds of Bitcoin mining initiatives have dispersed from the East to more crypto-friendly environments elsewhere, prompting global concern on unsustainable power consumption. 

Kazakhstan became a popular crypto-friendly destination following China’s ban. According to the Financial Times, Kazakhstan’s demand for electricity has risen about 8% since the beginning of 2021. "We have seen that our [country's] electricity consumption has literally increased by 7% in one year. That's a very big increase," Energy Minister Magzum Mirzagaliyev said on September 30, noting that consumption usually grows by about 2 percent per year.

The country now sits in the number two spot — just behind the U.S. — as one of the hottest crypto mining hubs, according to data from the University of Cambridge. The advent of crypto miners into the country has been a prime suspect in the shutdown of three major coal-fired power plants, leading to a government decision to ration electricity for those who “over consume” power. 

As Iceland experiences a similar influx in miners and subsequent power shutdowns, the country joins Kazakhstan with its restriction on cryptocurrency by turning away all-new Bitcoin miners in December 2021. Iceland and Kazakhstan serve as evidence of the growing power issues in crypto mining, and the carbon emissions relating to them only complicate issues. 

According to Fortune, 1,061 pounds of carbon dioxide are emitted from Bitcoin operations “every time you tap the app to buy a latte or zap a fraction of a buddy who beat you on a golf bet.” The environmental impact of crypto mining has attracted attention from all around the world. Tesla Inc. TSLA’s Elon Musk, for example, has argued for the necessity of sustainable mining practices, and Sweden’s governors have gone so far as to propose banning crypto mining completely. 

The media’s take on crypto mining has highlighted the harmful byproducts of the space, but it has done little to shed light on how crypto miners have responded. Net-zero carbon initiatives like that of the Mawson Infrastructure Group Inc. MIGI, for example, have been swept under the rug, and the vast adoption of innovatively sustainable practices has suffered a similar fate.

The Changing Landscape

Some claim that sustainability practices in crypto mining are not just alive but that they’re reshaping the energy sector.

Bitcoin miners, for example, are using a hybrid power approach to integrate previously unfeasible renewable energy sources into their mining operations. The process is divided as follows: higher-generation machines are powered by the grid, which provides a constant source of energy for a higher price, while lower-generation machines are powered by renewables like solar and wind, which provide intermittent, cheap and sustainable power. About 30% of the units on the Bitcoin network fall within this category, all of which can be powered by renewables. 

Additionally, Bitcoin miners have stretched their innovation onto oil rigs. A byproduct of the oil extraction process, methane is typically flared and broken down into lesser-damaging compounds. Bitcoin miners’ sustainability initiatives have taken this energy alternative and morphed it from pollutant to power source. 

Further down the road of sustainability, Bitcoin miners are increasingly joining demand-response programs, which limit the power miners receive from the grid in exchange for rebates. This outcome is possible because Bitcoin miners are part of an interruptible load, meaning they can survive regular power outages without disastrous consequences. Their participation in this program grants everyday citizens the power they need in a time when it is scarce. 

While some will lament that these are idealistic developments, Mawson Infrastructure Group is a company that reports a refutation. An energy-focused digital asset infrastructure has been at the core of the company’s business model since its inception. The company claims that 75% of non-carbon emitting energy (nuclear, hydro, wind) powers its operations and that it is on track to achieving its net carbon neutral goal by 2030.

With other high-profile operators like Bit Digital Inc. BTBT and BIT Mining BTCM issuing regular sustainability initiatives, It’s clear that these practices are not fictitious or idealistic but a reality for many miners around the world.

As crypto-mining attracts more eyes and ears, those businesses with sound sustainability practices and strong financials may end up garnering much of the crypto world’s attention. More importantly, they could serve as proof that crypto miners can not only be harmless but beneficial to those around them. 

This post contains sponsored advertising content. This content is for informational purposes only and not intended to be investing advice.

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