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Nuclear and Gas Fastest Growing Energy Sources for Bitcoin Mining: Data

Bitcoin (BTC) power mix has changed dramatically over the past few years, with nuclear energy and natural gas becoming the fastest growing energy sources to power Bitcoin mining, according to new data. I’m here.

The Cambridge Center for Alternative Finance (CCAF) released a major update to its Cambridge Bitcoin Electricity Consumption Index (CBECI), a data source dedicated to Bitcoin mining, on Tuesday.

Fossil fuels such as coal and natural gas will account for almost two-thirds of Bitcoin’s total electricity mix as of January 2022, accounting for more than 62%, according to Cambridge data. As such, the share of sustainable energy sources in the BTC energy mix reached 38%.

A new study suggests that coal alone will account for almost 37% of Bitcoin’s total electricity consumption as of early 2022, making it the single largest source of energy for BTC mining. Among the sustainable energy sources, hydropower turned out to be the largest resource, with a share of around 15%.

Even though Bitcoin mining relies heavily on coal and hydropower, the share of these energy sources in the overall BTC energy mix has declined over the past few years. In 2020, coal power powered his 40% of his BTC mining in the world. The share of hydropower will more than halve from 2020 to 2021, falling from 34% to 15%.

Bitcoin mining power mix from 2019 to 2022. Source: CCAF

In contrast, the role of natural gas and nuclear energy in Bitcoin mining has increased significantly over the past two years. The share of gas in BTC’s electricity mix surged from about 13% in 2020 to 23% in 2021, while the share of nuclear energy jumped from 4% in 2021 to nearly 9% in 2022. Increased.

According to Cambridge analysts, the migration of Chinese miners was the main reason for the sharp fluctuations in Bitcoin’s energy mix in 2020 and 2021. mix. As previously reported, Chinese authorities have closed a number of hydropower-powered cryptocurrency mining farms in 2021.

“The Chinese government’s ban on cryptocurrency mining and the consequent shift of bitcoin mining activities to other countries had a negative impact on bitcoin’s environmental footprint,” the study suggests.

Analysts also emphasized that BTC’s power mix varies widely by region. Countries like Kazakhstan still rely heavily on fossil fuels, while countries like Sweden have about 98% of their electricity generation from sustainable sources.

Analysts say the surge in nuclear and gas energy in Bitcoin’s power mix reflects a “shift of mining power to the United States.” According to the US Energy Information Administration, most of the country’s electricity is generated by natural gas, which accounts for more than 38% of the country’s total electricity production. Coal and nuclear account for 22% and 19% respectively.

Among other insights related to the latest CBECI update, the study finds that the greenhouse gas (GHG) emissions associated with BTC mining will increase by 48 million tons of CO2 equivalent as of September 21, 2022 ( MTCO2e). This is 14% lower. Lower than estimated GHG emissions in 2021. Research estimates that his current GHG emissions levels related to Bitcoin represent about 0.1% of his global GHG emissions.

Combining all the aforementioned findings, the Index estimates that by mid-September, approximately 199.6 MtCO2e could be attributed to the Bitcoin network since its inception. Analysts emphasized that about 92% of all emissions have occurred since 2018.

Total greenhouse gas emissions associated with Bitcoin in mid-September 2022. Source: CCAF

As previously reported, CCAF has been working on CBECI as part of a multi-year research initiative known as the Cambridge Digital Assets Program (CDAP). CDAP’s institutional collaborators include financial institutions such as British International Investment, Dubai International Finance Centre, Accenture, EY, Fidelity, Mastercard and Visa.

Related: Bitcoin could become a zero-emissions network: report

The new CDAP findings differ significantly from the data provided by the Bitcoin Mining Council (BMC). BMC said in July that he estimated the share of sustainable power sources in Bitcoin’s power mix at nearly 60%.

“This does not include nuclear or fossil fuels, so we can suggest that about 30-40% of the industry is powered by fossil fuels,” said Ben Gagnon, chief mining officer at Bitfarms8. told Cointelegraph in May.

According to CBECI project leader Alexander Neumueller, the CDAP’s approach differs from the Bitcoin Mining Council when it comes to estimating Bitcoin’s power mix.

“We use the information in the mining map to see where Bitcoin miners are and look up the power mix of a country, state or locality. As I understand it, the Bitcoin Mining Council asks its members to survey We are asking you to self-report this data in,” said Neumueller. He said there are still some nuances associated with the study’s lack of data.