Bitcoin mining represents an opportunity to develop clean and renewable energy and accelerate its adoption globally, according to Square and ARK Invest.
Square, chaired by Jack Dorsey, CEO of Twitter, is the parent company of the CashApp app. Square published research titled “Bitcoin is Key to an Abundant, Clean Energy Future,” which translated would be a statement about Bitcoin as the key to a future of abundance in clean energy.
The report was published yesterday, April 21, in partnership with the financial research firm ARK Invest, aiming to demonstrate how Bitcoin mining contributes to the creation of renewable energy and energy storage systems at an affordable price, they say.
“Bitcoin miners are unique buyers of energy as they seek an uninterruptible but flexible supply, settling payments in cryptocurrencies globally, no matter where they are, requiring only an Internet connection,” the report reads .
Bitcoin mining can save the energy industry
The four pillars of the research focus, first of all, on the fact that “Bitcoin mining represents an opportunity to accelerate the global transition to renewable energy”, as it facilitates the reallocation of excess energy production without reducing energy profitability of the electricity sector , which requires batteries to store electricity, which are not at all accessible to maintain.
Second, they argue that solar and wind energy are the two most economical energy sources currently , but they present risks because they are intermittent or tend, on the contrary, to congestion or saturation of electrical installations.
Third, Bitcoin mining allows the distribution of the surplus electricity produced , which is a solution to the problems of intermittence or decongestion, allowing power plants to continue producing without necessarily stopping.
Fourth, the high profitability of Bitcoin mining would mean that solar energy and wind energy can fully cover their operating costs, without incurring extra expenses. This would be beneficial to the energy business and industry if some of the energy goes to mining BTC.
Thus, they point out that, while the cost of energy production of solar and wind energy has fallen by 90% and 71%, respectively, the average costs for energy derived from fossil fuels amounts to between 5 and 7 US cents per kWh. The decrease in costs for wind and solar energy reached about 3 and 5 cents per kWh, compared to hydroelectric and geothermal energy, they note.
ARK Invest notes that Bitcoin mining is capable of covering 99% of the cost of producing 2000 MegaWatts (MW) per hour, as Bitcoin’s hashrate grows.
Our model shows that Bitcoin mining can transform intermittent energy resources into fairly stable power generation stations. This suggests that integrating Bitcoin mining into electrical development models can increase the market for energy resources for intermittent and renewable sources of power.
Consequently, ARK calls on companies, businesses and investors in the sustainable energy sector, to align with the strategy where Bitcoin mining and clean energy production come together harmoniously.
“The Bitcoin and energy markets are converging and we believe that the owners of today’s energy assets will be the miners of the future,” they say.
ARK Invest’s estimates are made based on an open source model, available on GitHub , which can be implemented by sustainable power plant operators to integrate Bitcoin mining into their power generation and storage facilities.
Bitcoin mining is tied to the production of electrical energy
Various accidents in coal mines in various regions of China, led to electrical power outages that have finally significantly impacted the performance of the Bitcoin network.
These power outages caused the Bitcoin hash rate to drop by almost 40%, as reported in CriptoNoticias, although some sources point to between 15% and 20%, really. This, despite the fact that just 2 weeks ago, Bitcoin broke its record for network processing power by miners.
Indifferently, this has brought huge delays in block confirmation times, variations in the average blockchain issuance time and, for the user who sends and receives transactions, the increase in commissions to levels little seen in history. of Bitcoin .
It is a fact that most of the Bitcoin mining facilities are located in China, just as many mining pools or pools operate in that jurisdiction. But this could change. In fact, one study suggests that by 2024 mining for Bitcoin in China would cease to be profitable , we reported in CryptoNews.
Bitcoin mining makes its way into other regions of the world
Being an urgent situation to remedy, the need to further decentralize Bitcoin mining, various companies and projects have undertaken their search in other parts of the world to develop sustainable mining operations.
Although this trend seems to be being fulfilled in countries such as the United States, Canada and Argentina, there is still a long way to go.
The positive side is that, unlike China, which cannot necessarily be considered a poor energy producer, but rather a powerhouse, since it also produces energy with hydroelectric plants , various projects have found novel energy solutions.
Some of them, for example, are established in hydroelectric energy, or even in the use of surplus methane gas production to carry out their operations.
Thus, ARK Invest and Square are not mistaken in that Bitcoin mining benefits from the production of green or renewable electrical energy, but in turn, contributes to a better management of these facilities and encourages the development of sustainable, efficient energy producers. and low cost.