As Bitcoin continues to gain popularity and value, concerns about its energy consumption have become more prevalent. However, a recent report by Coinmetrics suggests that the energy efficiency of Bitcoin has significantly improved over the past five years. The report also sheds light on the dominance of three specific mining rig models in the Bitcoin network’s computing power, underlining the need for greater energy efficiency in mining operations.
According to the report, the three mining rig models that stand out as the frontrunners in the Bitcoin network are the Antminer S19j Pro, Antminer S19 XP, and Antminer A19. Together, these models command 76% of the network’s hashrate, indicating their widespread usage among Bitcoin miners. The Antminer S19j Pro emerges as the leader with a 34.3% share, closely followed by the Antminer S19 at 28.1%, while the Antminer S19 XP lags behind with just 13.7% of the network’s hashrate.
One of the longstanding concerns surrounding Bitcoin mining has been its alarming energy consumption, primarily driven by the mining equipment. However, the Coinmetrics report argues that the network’s energy efficiency has made significant progress, particularly since the introduction of newer and more efficient mining machines in July 2018.
The report reveals that the average energy consumption of the Bitcoin network now stands at 33.6 joules per tetrahash (J/TH) of computing power. This represents a remarkable 62% increase in energy efficiency compared to the measurement recorded in July 2018, which was 89.3 J/TH. These findings highlight a positive shift in the industry’s approach to energy consumption.
While the improvements in Bitcoin’s energy efficiency are commendable, Karim Helmy, one of the authors of the report, cautions that the rate of improvement has slowed down in recent years. This deceleration suggests that the network has made significant strides in enhancing its energy efficiency and is now operating at a more sustainable level.
The Bitcoin network’s efforts to enhance energy efficiency are a direct response to the environmental impact associated with high energy consumption. In response to these concerns, Bitcoin miners are increasingly relying on sustainable and green energy sources. A study by CoinShares found that 74.1% of Bitcoin mining power is now derived from renewable energy, contributing to mitigating the negative effects of Bitcoin mining on the environment.
One notable example of this shift towards renewable energy is the initiative taken by Volcano Energy, a startup based in El Salvador. The company has set in motion a project to build a 241 MW renewable energy power generation park. So far, the project has secured an initial funding round of $250 million, with a total commitment of $1 billion. Notably, Tether, the issuer of the USDT stablecoin, is among the investors and plans to lend its expertise to ensure the project’s success.
This project reflects the growing commitment within the Bitcoin mining industry to reduce its environmental footprint and contribute to a more sustainable future. By embracing renewable energy sources, Bitcoin mining takes a significant step forward, aligning itself with the broader global shift towards renewable energy adoption.
The dominance of three mining rig models in the Bitcoin network’s computing power highlights the importance of energy efficiency in mining operations. The significant improvements in Bitcoin’s energy efficiency over the past five years demonstrate the industry’s commitment to reducing its environmental impact. With an increasing reliance on renewable energy sources, Bitcoin mining is actively embracing a more sustainable future. As the industry evolves, it will likely continue to find innovative ways to enhance energy efficiency and address the environmental concerns associated with cryptocurrency mining.