There were a handful of events that helped Bitcoin (BTC 3.54%) run to nearly $ 70,000 last year. Some of the highlights from 2021 that propelled it to new highs included Elon Musk publicly supporting Bitcoin, Tesla announcing that it would accept Bitcoin as payment, the SEC approving a Bitcoin futures ETF on the Chicago Mercantile Exchange, and the country of El Salvador making it legal tender.
However, not all of 2021 was sunshine and rainbows for the world’s most valuable cryptocurrency.
Bitcoin struggled when the Chinese government announced that financial institutions were forbidden to offer any kind of crypto-related product in May 2021. The prospect of future regulation also sent fear through the market when SEC Chairman Gary Gensler postulated that investor protection laws should apply to crypto exchanges as well.
Arguably the worst event related to Bitcoin in 2021 came when the Bitcoin supporter himself, Elon Musk, announced on Twitter that Tesla would cease payments in Bitcoin due to the impact Bitcoin mining has on the environment. The day Musk tweeted that out, Bitcoin slid 13% in a matter of hours.
Since Musk’s tweet, the stories revolving around China, regulation from the United States government, and general speculation have all seemed to fade out of the public’s eye. But the environmental concerns around Bitcoin mining are the one thing it can’t quite shrug off.
A new age
Fast forward nearly a year and it is beginning to look like the narrative around Bitcoin mining might be starting to change. And it could be just enough to drag Bitcoin out of its recent lulls.
Bitcoin miners and energy companies around the world have spearheaded this problem. Many Bitcoin miners are choosing cleaner energy sources due to their increasing abundance, cheaper costs (which result in greater profits), and overall goals of minimizing carbon footprints.
Some of the most significant landmarks toward the coveted clean energy goal have been reached just this year.
Aspen Creek Digital, a Bitcoin mining company, recently launched a 10 megawatt solar farm in western Colorado. For context, it is believed that 1 megawatt is capable of powering 267 Bitcoin mining machines.
The company also has plans for a similar site in Texas which will be operational sometime this summer. Solar panels on these farms will provide all the energy needed to mine Bitcoin with zero pollution.
The project has even attracted crypto evangelist Mike Novogratz and his company, Galaxy Digital (TSX: GLXY)to set up their own miners on site.
This is just one example of a trend that seems to be growing among miners as they look to cut costs and remain profitable. Other Bitcoin mining companies are coming to the realization that renewable energy is the future.
One of the most innovative Bitcoin mining operations is being led by the Houston-based tech company Lancium. The company runs two data centers in West Texas that utilize solar and wind to power their Bitcoin mining. What stands out from Lancium’s operation is that it is tied into the state’s electrical grid.
These centers, known as “Clean Campuses,” fill a much needed gap in Texas’s electrical grid. Texas has an abundance of solar and wind power, so much so that there is often not enough demand to meet the supply. This imbalance can cause instability throughout the grid. To stabilize the grid, there needs to be a buyer when supply is high and demand is low.
Lancium’s Clean Campuses offer a viable and profitable solution to this problem. When energy demand is low, miners utilize the unused energy. But when demand is high, Lancium’s miners can “unplug” and allow other users on the electrical grid to tap into the stored up renewable energy.
The company hopes to expand its capacity to more than 2,000 megawatts in the coming years.
In a December 2021 report by the Bitcoin Mining Council, it was estimated that nearly 59% of Bitcoin mining was supported by renewable energy sources. That number was almost 75% before the mass exodus of hydroelectric-powered Bitcoin miners that were banned from China in 2021.
Bitcoin is becoming a greener technology. There is no questioning it uses a considerable amount of energy but current trends point to a future where Bitcoin uses clean, renewable energy sources.
If the narrative around Bitcoin’s energy consumption can shift, and especially if Elon Musk can share these positive developments like he does the negative ones, it might just be enough to put an end to the Bitcoin energy usage discourse.