Bitcoin has become a frequent target of environmentalists and critics in general for its reliance on massive amounts of power consumption. The Bitcoin mining process takes up a lot of space and energy due to its proof of work consensus model. Ethereum blockchain runs on the same principle, but it has been broadcasting the possibility of upgrading to a proof of stake system soon.
The US Treasury Secretary, Janet Yellen, has recently remarked that the energy consumption issue of cryptocurrencies can pose a big threat to the environment and also affect the costs of the limited fuel resources. Although there had been countless studies to support the claims the Bitcoin is consuming more energy than the state of Argentina, a recent study by Square Inc. and Ark Investment tends to disagree.
Jack Dorsey Agrees that Bitcoin is Promoting Renewable Energy Development
The report conducted by Square Inc. purposes that Bitcoin mining farms can streamline and encourage renewable energy projects with incentives. The report claims that solar and wind power plants generate many times more electricity than fossil fuels; their supply is often at odds with the demand. When the energy demand is higher, renewable energy resources generate less, and when the demand is limited, the green energy supply is overpowered.
The study supports a theory that by adding mining farms parallel to green energy grids, the crypto miners could stabilize the renewable energy system. Ark Investment also participated and endorsed this study. However, Square Inc. is among the largest Bitcoin holders by investing about $210 billion in Bitcoin reserves thus far. Likewise, Ark Investment is also facilitated Tesla to invest $1.5 billion in Bitcoin this year. Due to personal interest, many are skeptical about the authenticity and substantiality of these claims.
Bitcoin Skeptics do not Agree with the Survey Results
Another report by International Energy Agency claims that about 12 percent of the electricity demand would be fulfilled by green energy channels by 2030. However, considering that green energy is free and it produces many times higher yield, this transition seems to move at a very low rate. Chris Larson, the co-founder of the controversial token XRP, says that other industries like steel, concrete, air travel, and agriculture are in direct competition with Bitcoin to gain access to renewable energy sources.
No matter what the case, the renewable energy transition is unreasonably restricted and heavily politicized. Provided that the mining farms are regulated to ensure that they only rely on renewable energy, there is a chance that it could become a real trend. Since the renewable energy projects would be sponsored by mining projects, they could also contribute to overall economic development.
