One of the biggest arguments levied against Bitcoin [BTC] is that its mining process consumes a lot of energy for something that a lot of individuals say has no value. Maintaining the network took 4.7 GigaWatts of power, which naysayers say consumes more electricity than close to 160 individual countries.
However, research has emerged that shows that Bitcoin mining might not be so bad for the world after all. A study conducted by Coinshares shows that while miners are currently running at a loss, the process may be consuming excess electricity that is taken off the grid and wasted otherwise.
This effectively means that the Bitcoin network is siphoning off existing electricity networks and making use of all the electricity that would otherwise be grounded and waster. This provides a very different perspective than those pushed by the detrimental elements of Bitcoin’s power consumption.
The researchers also state that the network acts as an “electricity buyer of last resort”, as the network not consuming electricity will result in the curtailment of the supply. Curtailment refers to the consequences of over-generation of electricity from renewable sources. Electricity, which is produced, is rejected by the grid for fear of overloading and risk of a grid shutdown.
The paper stated:
“If demand for Bitcoin mining keeps increasing, its demand alone could facilitate opportunities for tapping highly productive renewables locations in areas that today would be uneconomically remote.”
Researchers illustrated this example by speaking about the Sichuan region in China, which is where most of the mining of Bitcoin takes place today. The location is chosen by miners due to its low electricity costs, owing to renewable resources, and cool climate, which reduces the cooling costs of the ASICs.
Moreover, they have also discovered that Bitcoin mining farms have a higher possibility to appear in geographical areas with a high renewable energy penetration. They went on to say:
“Based on historical data on energy mix and locations of cryptocurrency mining operations in China, we have shown that contrary to the common narrative, the vast majority of global Bitcoin mining capacity (minimum 77.6%) is running on renewable energy.”
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