Cambridge University Judge Business School’s Centre for Alternative Finance (CCAF) has recently released the Cambridge Digital Mining Industry Report, highlighting that the proportion of sustainable energy used in the Bitcoin mining industry has significantly increased over the past few years, rising from 37.6% in 2022 to 52.4%.
Background
For a long time, one of the reasons for the ongoing criticism of Bitcoin by its opponents is their belief that the heavy reliance on energy in Bitcoin mining activities will have a huge negative impact on the environment. However, it is known that the proportion of clean energy used in Bitcoin mining has been increasing year by year. According to the recent Cambridge Digital Mining Industry Report published by the CCAF, the proportion of sustainable energy used in the Bitcoin mining industry has significantly increased from 37.6% in 2022 to 52.4%.
Increase in Sustainable Energy Adoption
The CCAF report indicates that the current proportion of sustainable energy used in Bitcoin mining has reached 52.4%, of which 9.8% comes from nuclear energy, and 42.6% comes from renewable energy sources such as wind and hydropower. The report also notes that natural gas has overtaken coal to become the largest single energy source, with its usage rising from 25% in 2022 to 38.2%, while the proportion of coal has dramatically decreased from 36.6% to 8.9%.
It is worth mentioning that this study covers 49 mining companies, 41% of which are publicly listed, operating across 23 countries, including Bitfarms, CleanSpark, Hut 8, IREN, MARA, and Riot.
Additionally, the research encompasses approximately 48% of the global Bitcoin mining hash rate and estimates that the annual electricity consumption of the Bitcoin network is 138 terawatt-hours (TWh), accounting for about 0.5% of global electricity consumption, with CO2 equivalent emissions amounting to 39.8 million tons. Moreover, regarding electronic waste, the report indicates that 86.9% of retired hardware is resold, reused, or recycled, demonstrating the industry’s efforts in environmental management.
Response to Critics of Bitcoin Mining
In response to external criticisms of Bitcoin mining, CCAF researchers stated: “Despite the remarkable growth of Bitcoin mining, it is also rapidly transforming, and outdated assumptions or one-sided information can often mislead those who are unaware of the truth.”
Furthermore, the CCAF researchers emphasized: “The conclusions of this report are entirely based on direct insights from practitioners rather than abstract conjecture, filling a long-standing data gap. We provide solid and transparent evidence covering nearly half of the global mining activities to facilitate fact-based policy discussions.”
Will Tesla Restart Bitcoin Payments?
It is noteworthy that in 2021, Tesla founder Elon Musk publicly supported Bitcoin, and Tesla subsequently purchased $1.5 billion worth of Bitcoin as part of its financial management strategy. That same year, Musk announced that Tesla’s U.S. stores would accept Bitcoin for electric vehicle payments and planned to expand this to a global scale.
However, just two months later, due to concerns over the environmental impact of mining and the falling price of Bitcoin, Musk announced the suspension of Bitcoin payments for vehicle purchases. In a statement, he expressed: “We are concerned about the rapid increase in fossil fuel use for Bitcoin mining and transactions, especially coal, which has the worst emissions of all fuels.”
Nevertheless, Tesla left the door open, stating that it would resume Bitcoin transactions once mining shifts to more sustainable energy. Musk also tweeted: “When miners use about 50% clean energy and show a positive trend, Tesla will resume Bitcoin transactions.”
Now, with the Cambridge report indicating that the proportion of sustainable energy used in Bitcoin mining has reached 52.4%, surpassing the 50% threshold set by Musk, does this mean that Tesla will restart Bitcoin payments? Tesla has not yet made a public statement, and its future actions are worth monitoring.
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