Bitcoin mining, which initially relied heavily on fossil fuels, has undergone a significant transformation in recent years. A new report released by the MiCA Crypto Alliance in collaboration with Nodiens reveals an important shift in the energy landscape of Bitcoin mining.
Coal energy usage, which once made up 63% of Bitcoin’s mining energy in 2011, has now dropped dramatically to just 20% in 2024. This transition comes amid growing concerns over environmental impact and increasing pressure for sustainable mining practices.
Bitcoin Mining Shifts from Coal to Renewable Energy
While coal mining energy usage as dropped, renewable energy’s share in BTC mining has grown steadily, with an average annual increase of 5.8%.
As renewable energy sources like solar, wind, and hydropower become more accessible and cost-effective, BTC miners have increasingly turned to these options to reduce their carbon footprint. The study forecasts that this trend will continue, with a further decarbonization of the industry expected in the coming years. The report noted:
Under high-price scenarios, Bitcoin’s energy consumption could grow significantly by 2030, yet its carbon footprint will largely depend on the continued shift to renewables. With strong climate policies, emissions could decrease despite rising energy demand.
Despite the decrease in coal use, global coal consumption has surged, and the International Energy Agency (IEA) projects that the demand for coal will remain high, particularly in emerging economies like India and Indonesia.
Bitcoin Mining’s Future: Energy Consumption and Price Scenarios
The future of BTC mining’s energy consumption is a topic of considerable interest, especially in light of its environmental impact. According to the MiCA Crypto Alliance’s report, five different BTC price scenarios were analyzed, with the aim of understanding how future market trends will influence energy consumption.
In a medium-price scenario, where BTC trades around $250,000, renewable energy could make up as much as 74.3% of BTC’s total electricity usage, excluding nuclear power.
This represents a significant step toward reducing BTC’s environmental footprint and relying more on sustainable sources. However, despite the positive developments in renewable energy adoption, BTC’s energy consumption is expected to peak around 2030.
According to estimates by digital asset platform NYDIG, even in a high-price scenario of $500,000 per Bitcoin, Bitcoin’s electricity consumption could increase 11 times over its 2020 levels, accounting for 0.4% of global primary energy consumption.
This projection highlights the growing challenge of balancing BTC’s demand for energy with sustainability goals. With BTC mining’s future energy needs increasing as the market expands, it will be crucial for the industry to continue shifting towards cleaner, renewable energy sources to mitigate its environmental impact.
Featured image created with DALL-E, Chart from TradingView
