Bitcoin and its network of ASIC miners consume massive amounts of energy to secure the network and process transactions. The need for proof of work as the backing for security and cost to produce new coins is a feature, not a bug.
As Bitcoin becomes more valuable, more resources are allocated, as miners want to get in on the potential income and as a result, they support the network with a higher hash rate. The higher the hash rate, the more secure the network, driving even more users to trust it as its overall security metrics improve.
If Bitcoin is to grow and secure trillions in global wealth and settle hundreds of billions in transaction volume daily, we will see even more energy committed to the network.
While the network offers many benefits, such as a secure, reliable payment network, international banking for anyone who uses it, and a store of value for those who hold it long-term, its electricity consumption remains controversial for energy use critics.
Critical of Bitcoin energy consumption
These critics argue that despite Bitcoins’ benefits, the energy consumption needs to be lowered to be “sustainable” and that the network’s benefits outweigh its environmental impact. They also claim that Bitcoin’s energy consumption will likely increase as the network grows, making it an even more significant environmental threat.
While institutions like Green Peace campaign for Bitcoin to change to proof of stake, a particular cohort of miners find that their interests align with environmentalists’ desires.
As renewable energy comes online in all parts of the world, storage and load balancing have become a real issue due to the intermitted nature of green energy, be it solar, geothermal, wind or hydro. To ensure these energy generation projects maximise energy use, tacking on Bitcoin miners or getting Bitcoin miners to colocate is growing in popularity.
Additionally, home miners who have solar have limited battery capacity. When their solar system generates an oversupply, a Bitcoin miner can act as overflow capturing, turning that excess energy into network security and Bitcoin rewards for homeowners.
What is green Bitcoin mining?
Green Bitcoin mining is the same as any Bitcoin mining operation; the only difference is the classification of the energy source as green or renewable energy, such as solar, wind, geothermal and hydropower, but can be extended to nuclear or captured gas.
There are several different ways to mine Bitcoin greenly.
- Some miners source from a grid with a renewable energy mix to power their mining operations.
- Others purchase renewable energy credits from utility companies.
- Others locate their mining operations in areas with abundant renewable energy resources.
- Some are even selling additional Sustainable Bitcoin Certificates to offset the cost of mining with unreliable energy sources.
Green Bitcoin mining is becoming increasingly popular as miners and investors looking to invest in mining require an attractive narrative to raise funds. As more scrutiny is placed on mining consumption, a number of major Bitcoin mining companies have committed to using 100% renewable energy by 2025.
What is a green mining pool?
A Bitcoin mining pool is a group of miners who combine their resources to mine Bitcoin together. This allows them to increase their chances of finding a block and earning a reward, and miners can group into pools for various reasons, like KYC miners or miners who focus on a certain energy source or grouping miners in a certain country.
A green mining pool is a Bitcoin mining pool that makes it easier to track renewable energy sources that power mining operations. These pools help certain corporate miners showcase their contribution to the network and their so-called commitment to reducing the environmental impact of Bitcoin mining.
There are a couple of different green mining pools available, and they operate in a variety of ways. Some pools require miners to use renewable energy sources, while others allow miners to use a mix of renewable and non-renewable energy. Some pools also offer financial incentives to miners who use renewable energy, such as reduced fees or higher rewards.
Here are some of the benefits of joining a green mining pool:
- Reduce your environmental impact: By mining with a green pool, you can help reduce the environmental impact of Bitcoin mining.
- Support renewable energy: Green mining pools support the development and use of renewable energy sources.
- Get financial incentives: Some green mining pools offer financial incentives to miners who use renewable energy.
Terra Pool brings Green Bitcoin Miners together as the first to mine Bitcoin entirely with clean energy. All miners who join the pool work together to make Bitcoin mining carbon neutral.
Pega Pool is a platform based in the United Kingdom and is one of the newest mining pools in the industry. Of course, mining in a network, joining forces with other miners and earning BTC together is nothing new. PEGA Pool, however, offers miners a way to make their operations more sustainable and welcomes a mix of miners.
Should you join a green mining pool?
If you are interested in joining a green mining pool, it is important to do your research to find a pool that is right for you. Consider factors such as the pool’s energy mix, fees, and rewards structure.
While Green mining pools might sound good from a public relations perspective, they still carry the same risks as all other miners; they are not immune to the volatility of the Bitcoin market.
In addition, you’re relying on a group that leverages unreliable energy sources to compete with those that do in the fossil fuel miners, so the profitability of mining can fluctuate depending on their access to energy along with the mining lottery, the price of Bitcoin and the difficulty of the network.