Author: Zac Greenwood 2021-05-16 21:15:21
Published on: 2021-05-16T21:15:21+00:00
The cost of mining Bitcoin is not just energy, but includes capital expenses for equipment and operational costs for staff, rent, etc. Miners using excess waste energy such as Chinese miners close to hydropower stations pay a near-zero price for energy and are unlikely to be bound by the price of electricity. These miners are responsible for a significant share of the total energy usage of Bitcoin. Since such energy is often waste energy from renewable sources such as hydropower, the carbon footprint of Bitcoin is not nearly as alarming as its energy usage implies. In fact, access to renewable, near-free waste energy helps keep Bitcoin more green than it would otherwise be. The high energy usage of the Bitcoin network indicates cheap, otherwise wasted energy is employed. Large miners having access to near-free energy use the block-reward sized budget fully on equipment and other operational expenses. Therefore, any proposal to decrease energy usage would not be likely to decrease appreciably because large miners drive out competing miners that employ more expensive, often non-renewable sources of energy. On the other hand, roughly every four years, the coinbase reward halves, which does significantly lower the miner budget, at least in terms of BTC.
Updated on: 2023-06-14T21:54:06.347498+00:00