- A recent study conducted by the United Nations suggests a direct correlation between Bitcoin’s price and the energy required for mining operations.
- Hydropower covered 16% of the total electricity demand for the global Bitcoin mining network, while nuclear, solar, and wind energy sources contributed 9%, 2%, and 5%, respectively.
- Global efforts towards green alternatives to meet energy demands will also help reduce the carbon footprint of Bitcoin and the crypto ecosystem.
According to reports published by the United Nations, there may be a correlation between Bitcoin mining and price: Here are the details of the study!
Correlation Between Bitcoin Mining and Price
A recent study conducted by the United Nations suggests a correlation between Bitcoin’s price and the energy required for mining operations. UN scientists assessed the activities of 76 Bitcoin mining countries during the 2020-2021 period and found that the global Bitcoin mining network consumed 173.42 terawatt-hours of electricity. During this time, the crypto ecosystem was experiencing a bull run, and Bitcoin reached an all-time high of $69,000. The UN report emphasized:
“A 400% increase from 2021 to 2022 resulted in a 140% increase in global Bitcoin mining network energy consumption.”
During that period, fossil energy sources accounted for 67% of the electricity generated for Bitcoin mining. However, crypto entrepreneurs took proactive measures to increase their reliance on green energy. Hydropower covered 16% of the total electricity demand for the global Bitcoin mining network, while nuclear, solar, and wind energy sources contributed 9%, 2%, and 5%, respectively.
According to the UN report, the ten largest Bitcoin mining countries at that time – China, the United States, Kazakhstan, Russia, Malaysia, Canada, Germany, Iran, Ireland, and Singapore – were responsible for 92-94% of Bitcoin’s global carbon, water, and land footprint.
Global efforts to shift towards green alternatives to meet energy demand will also help reduce the carbon footprint of Bitcoin and the crypto ecosystem. Recently, Genesis Digital Assets Limited, a mining and data center company with 400 megawatts (MW) of electricity production capacity worldwide, opened a new data center in Sweden and began operating 1,900 Bitcoin mining machines supported by the country’s increasing surplus of renewable energy.
Mining not widespread due to energy costs
Christian Anders, founder of BT.CX, stated that Bitcoin mining is not widespread due to high energy costs but added:
“Sweden, Finland, and Norway sometimes have energy surpluses and negative energy prices, which are largely based on difficult-to-distribute, remote-location renewable energy like hydropower.”
Meanwhile, Bitcoin mining equipment manufacturers continue to offer hardware that focuses on energy efficiency. Bitmain released the efficiency-focused Antminer S21, and Nazar Khan, COO of TerraWulf, emphasized that the role of Bitcoin mining equipment manufacturers is to place the loads of Bitcoin mining in locations that are making this decarbonization process easier and how we will facilitate it.
