Square and Ark Invest argue that Bitcoin miners can increase the efficiency of the renewable energy industry by acting as the ultimate buyers of electricity.
Some of Bitcoin’s most prominent advocates have sought to present cases where Bitcoin could be more environmentally friendly, with a collaborative paper from researchers at financial services firm Square and Investment manager Ark Invest asserts that Bitcoin mining can increase efficiency in renewable energy production.
The author of “Bitcoin Clean Energy Initiative” or BCEI, seeking to refute the claim that “the computation required to secure Bitcoin […] are damaging the environment and destroying the planet“argued that Bitcoin mining encourages electricity generation “from carbon-free renewable sources.”
The article has received support from leading crypto companies including Jack Dorsey’s Square, Elon Musk’s Tesla, and Cathie Wood’s Ark Invest.
— Elon Musk (@elonmusk) April 22, 2021
In an April 22 tweet, Square argued that while solar and wind power can produce cheaper energy than fossil fuels, these renewable sources often create an oversupply when demand increases. low and vice versa struggles to meet consumer and industry demand when demand is high.
According to the researchers, the problem of different renewable production and the need for electricity can be minimized by building an ecosystem.”where solar/wind, battery and Bitcoin mining coexist to form a green grid running almost entirely on renewable energy.”
“This is not only doable, but it can be done without jeopardizing industry profitability.”
The article describes the Bitcoin mining sector as “ultimate energy buyer“possibly anywhere in the world.
Although solar and wind power cost between about half and a third of fossil fuels per kilowatt hour, the paper asserts the geographic limitations of renewable energy plans often lead to provide energy”abundant or non-existent“.
“The end result is electricity that is significantly more than society needs for several hours a day, and not nearly enough when demand spikes. This challenge is also seasonal.”
By combining Bitcoin mining with renewable energy storage, the paper argues that the limitations of batteries and energy drain can be offset by transferring excess electricity to mining farms. If miners could harness only 20% of the wind and solar energy lagging on the US power grid, BCEI estimates that global mining capacity could triple.
The mobilization of miners as a last resort electricity buyer will also boost the profitability of the renewable energy sector, giving producers the opportunity to “gap the price of electricity and the price of Bitcoin.” “.
The paper also asserts that the costs associated with the expansion of renewable energy will decrease rapidly.
“The Bitcoin and energy markets are converging and we believe that today’s energy asset holders can become tomorrow’s miners.”
Alright, I’m just gonna come out and say it. Bitcoin mining is bad for the environment. #bitcoin #EarthDay2021
— Mati Greenspan (tweets financial advice) (@MatiGreenspan) April 22, 2021
However, not everyone is convinced by BCEI’s assertions, with prominent analyst Mati Greenspan describing the report as “justifying Bitcoin’s massive energy consumption”.
Rather than offer a solution to Bitcoin’s growing energy consumption, Greenspan describes the BCEI paper as providing a blueprint for “a feedback loop consumes a lot of energy“. Greenspan argues:
“The main focus of the paper doesn’t seem to be looking too much for solutions to justify Bitcoin’s massive energy consumption and paint a rosy picture of how it could positively impact the sector. clean energy.”
Earlier this year, researchers at Cambridge University estimated that Bitcoin consumes 121.36 terawatt-hours annually – ranking the network among the 30 largest energy users worldwide and in the country as a whole. .
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