Facing Regulatory Pressure, Bitcoin Miners Turn to Green Initiatives – Report
Amid an existential threat from regulation, bitcoin miners are under increasing pressure to go green. To prove that crypto mining has a role in the green economy, miners are increasingly turning to green initiatives. The role of crypto miners is essential for the crypto industry. All Proof of Work networks, including Bitcoin, requires an energy-intensive computational process to secure their networks. Without crypto mining, Bitcoin could deliver on its promise of a decentralized currency. However, practice is increasingly under regulatory pressure. Crypto mining uses between 120 and 240 billion kilowatt-hours per year. That is equivalent to the energy usage of many countries, including Australia or Argentina. For that reason, many jurisdictions already took steps to curtail or outright ban crypto mining. One of them is China, the country that used to be the crypto mining capital of the world. The country banned all crypto mining in September 2021, threatening severe punishments for those that defied the ban. Many other jurisdictions are currently taking steps to curtail mining. Significantly, the European Union has repeatedly signaled that it wants to curtail proof of work mining. As the continent faces an energy shortage, a threat of a mining ban is looming over the industry. Russia, the country on the other side of the energy crisis, is taking similar steps. Earlier in December, Russia banned crypto mining in residential areas with subsidized electricity. Moreover, authorities blamed crypto mining for energy shortages in some areas of the country. Regulatory pressure could pose an existential threat to both miners and PoW tokens. That’s why miners are eager to turn to renewables. Hydroelectric plants, solar farms, and wind turbines are becoming more common power sources for miners. According to the 2022 report by the Bitcoin Mining Council, 59.5% of Bitcoin’s mining worldwide comes from renewable energy. Green energy is often more cost-efficient than traditional fossil fuel sources. Using renewables is just a start. Miners are also finding other innovative ways to make a green case for PoW. Many argue that Bitcoin’s flexible demand for energy can support a transition to the green economy. For instance, bitcoin miners have traditionally shut down operations when the energy grid faces disruption. For example, US-based crypto miners have voluntarily shut off operations during the latest winter storm that swept the continent. Other mining initiatives are working on using excess renewable capacity. In early December, Jack Dorsey’s firm Block led a $2 million seed round into Gridless. The startup operates Bitcoin mining sites on small-scale renewable producers in rural Africa. These producers often have excess capacity that goes unutilized. Mining pools, which pool resources from individual miners to mine more efficiently and produce higher rewards, are also taking steps to go green. Some are joining initiatives that offer mining companies a chance to offset their carbon footprints. One mining pool, PEGA, offers green miners discounted mining pool fees. It uses the fees other miners pay to offset a part of their carbon footprint – by planting trees. “Bitcoin miners are one of the very few industries for which going green is an existential imperative,” says David Bungay, PEGA Pool CEO. “That is both a challenge and an opportunity,” he added. “Very few industries are under such immense pressure from regulators,” Bungay said. “That is why crypto miners are currently the leaders in finding green tech solutions. He explained that the incentives for going green are higher in this industry than in any other. For that reason, PEGA Pool and other miners are looking for ways to make a case for PoW mining by going green. “We went with a dual approach. We are incentivizing green miners by giving them a 50% discount on mining pool fees. That is a significant amount in this low-margin business”, he added. “Secondly, for miners that are not using green energy, we provide offsets,” he added. “We went with the simplest and the most impactful – planting trees,” Bungay said. So far, the company has planted 84,000 trees and hopes to plant much more. The result is an estimated annual offset of over 2,200 tonnes of CO2. That number is growing by the day, Bungay said. “We know crypto mining is essential for powering the decentralized financial system,” Bungay said. “We believe that more and more people will soon start to realize its role in the green economy.” The crypto industry is at a tipping point. Miners, users, and investors are all starting to realize the importance of greening up their operations. This is essential to make PoW tokens more sustainable and accepted by regulators.
Miners Going Green
Crypto Mining Pools Plant Trees to Offset Carbon Emissions
On the Flipside
Why You Should Care
Read more: https://dailycoin.com/facing-regulatory-pressure-bitcoin-miners-turn-to-green-initiatives-report/
Text source: DailyCoin.com
