Bitcoin Mining Became Greener and More Efficient in 2022
Despite much turmoil in 2022, the Bitcoin mining industry’s hashing technology only continued to grow more efficient throughout the year, according to a new survey from the Bitcoin Mining Council (BMC).
The industry also grew marginally greener, retaining a sustainable energy mix of over 58%.
Bitcoin is Green, Says BMC
In a press release on Thursday, the BMC confirmed that its members’ hashrate has increased from 95 exahashes from its inception in Q1 2022 to 119 exahashes by Q4 2022. An exahash is equal to 1 quintillion hashes – answers to a complex math problem produced by miners in a race to create Bitcoin’s next block.
BMC represents 48.4% of Bitcoin’s global hash rate, meaning its collective increase in hashrate has implications for the entire network. A higher hashrate forces Bitcoin’s difficulty to adjust higher, increasing the network’s security and settlement assurance.
Powering those computers costs a lot of electricity, but the BMC argues that its electricity sources are primarily clean – and its use is highly efficient.
“The results of this survey show that the members of the BMC and participants in the survey are currently utilizing electricity with a 63.8% sustainable power mix,” read the group’s statement. “Based on this data, the global bitcoin mining industry’s sustainable electricity mix has improved marginally to 58.9% and remains one of the most sustainable industries globally.”
Bitcoin’s proof of work mechanism is often derided for incentivizing network users to consume vast amounts of electricity. According to the Cambridge Bitcoin Electricity Consumption Index, the network currently consumes roughly 102.91 TWh per year – more than all of Finland.
Mining proponents, however, contend that this mix is largely renewable – and set to become cleaner over time as miners seek out the world’s cheapest energy sources. Furthermore, curtailment programs can effectively prevent the mining industry from draining energy from those who need it most in times of peak demand.
“In Q4 2022, we also saw a significant increase in curtailment, with 14 BMC members reporting 2.5 GW worth of Bitcoin mining operations participating in curtailment programs and 1,280 GWh of energy released back to local grids during times of peak demand,” said Ben Gagnon, Chief Mining Officer of Bitfarms.
Year over year, the mining network’s technological efficiency also grew by 16%, “from 19.3 EH per gigawatt (GW) in Q4 2021 to 22.4 EH per GW in Q4 2022.”
Is Proof of Stake Better?
To virtually do away with Bitcoin’s energy consumption, some figures have spoken in favor of transitioning it to a proof of stake consensus mechanism. Such people include Commodities and Futures Trading Commission chairman Rostin Benham and Ripple co-founder Chris Larsen.
Proof of Stake lets users stake their cryptocurrency holdings to provide financial security for the network rather than energy. Ethereum adopted this technology last September, reducing its total energy consumption by 99.9%.
Bitcoiners, however, are largely opposed to the move. The Bitcoin Mining Council and other community figureheads issued a letter to the Environmental Protection Agency in May, arguing that proof of stake is unsuited to “govern a global, apolitical monetary system.”