Blockchain Mining Economy and Energy Sustainability

BAI’s advisor and staff were invited to attend one of the series Bitcoin related conferences themed as Energy and Mining in Houston on July 27 2023. Blockchain startups such as Riot, Unchained, Priority Power, Landry and NYDIG attended this meeting and had heated discussion around how bitcoin mining impacts the energy industry. Ghazaleh B, the head of Mining department at Riot, shared her insights of bitcoin mining economy and its future development. BAI’s advisor May Pang also shared BAI’s mission and emphasized the importance of the sustainable development of blockchain industry as the mining activities has create tremendous needs for energy consumption which may impact the climate.

In the past five years, Bitcoin’s energy consumption has grown from 11.8 to 120.5 TWh per year; the equivalent of adding 2,400 wind turbines to the grid every year. For context, the United States has installed an average of around 3,000 wind turbines a year, according to the USGS. According to one of the meeting attenders NYDIG’s estimate, the electricity consumption from Bitcoin mining could grow to 706 TWh by 2027.

Crypto’s rapid growth in energy use is attracting questions over its sustainability . Currently, 57% of the energy used for crypto mining comes from renewable sources. However, given the inherent incentive for miners to minimize energy costs, and the fact that clean energy is now the cheapest source of power in some countries as “available” energy, we expect the share of green energy to grow quickly. This is especially true for countries with a strong policy push for decarbonization.