2021-8-19 22:57 |
For a long while, the huge amounts of energy used by the Bitcoin network in mining the cryptocurrency have been a subject of discussion. Many have decried the network to be bad for the environment, as the high energy usage could be contributing to climate change.
Inevitably, this was the argument Elon Musk used to stir the waters in the cryptocurrency market earlier this year, when his electric car company, Tesla, made a U-turn on accepting Bitcoin as payment for vehicle purchases.
The announcement, which was made in May via Twitter by Musk who was then an ardent backer of Bitcoin, stated that the company was concerned about the increasing use of fossil fuels, especially coal which has the worst emission of any fuel, by Bitcoin miners. The announcement also clarified that the company would however not sell its around $1.5 billion Bitcoin holdings and would resume accepting it as payment when the network transitions to more sustainable energy usage.
Musk followed up the announcement the next day with a tweet that described the energy usage of Bitcoin over a few months prior to then as “insane.” The tweet was supported by data pulled from Cambridge Bitcoin Electricity Consumption Index (CBECI) – a tool that monitors the Bitcoin network’s power demand – which showed Bitcoin to be consuming an estimated 148.77TWh annually at the time, a figure some analysts believe will power a country the size of Switzerland.
However, some analysts have taken up the issue with Musk’s estimate of the number of unsustainable energy sources used in mining Bitcoin, but there is consensus that the cryptocurrency has high energy requirements. This is basically because to verify transactions in Bitcoin’s “proof-of-work” system, specialized computers are required to solve ever more complex math problems. Bitcoin’s decentralized nature makes it drastically more energy-intensive than verifying transactions on centralized networks.
Bitcoiners have however been on the path to change the narrative and have been looking for ways to make their energy footprint more environmentally friendly by using green energy sources. The crackdown on Bitcoin miners in China was also a boon for the network as they have been relocating to new places. The network’s collective search for greener energy may soon be rewarded as a solution seems to have materialized.
Bitcoin community members have noticed that Quebec, a province of Canada, can single-handedly power the whole of the Bitcoin network with its unused hydroelectric power, adding that Canada as a whole had 400 TWh of hydroelectricity, which was more than enough to supply the 129 TWh the Bitcoin network needed.
Certainly, the possibility is there for Canada to become the new China in Bitcoin mining as Chinese miners have also been relocating to Canada. A recent article on CBC, a Canadian news outlet, notes that a lot of Bitcoin miners could arrive in the Canadian province of Alberta. Analysts have also noted that the climate in Canada could make Bitcoin mining more efficient by reducing the amount of energy required for cooling the mining rigs. On the one hand, there is no indication that the government is in on the program to increase Bitcoin miners’ presence in the country, on the other hand, there is also no indication that they are opposed to private enterprises doing so.
Notably, such a move on the part of the government could be potentially mutually beneficial to both the country and Bitcoin network as exemplified by El Salvador’s adoption of Bitcoin as legal tender. A recent Bank of America report has already noted that the country is helping foreign direct investment into the country’s economy.
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