Bitcoin mining is often said to be bad for the environment. But is it, really? An increasing amount of the hashrate is coming from places where electricity is in surplus and very cheap as a result. It just so happens that these are primarily clean and renewable energy sources.
The Media is wrong
If you've been around in the space for a while then you know the arguments against Bitcoin's Proof-of-Work mining and it's supposed negative impact on the environment. A widely circulating study earlier this year stated that Bitcoin's energy consumption was on par with the country of Ireland, and the hashrate has only been growing more since that came out. Surely all that electricity usage must be horrendous to the environment?! With today's focus on global warming Bitcoin has gotten a bad rap.
As with everything that has to do with Bitcoin, the reality is a lot more nuanced that it would appear at first glance. Oh Bitcoin, will you ever stop surprising us with your infinite depth and nuances?
Clean energy turns out to be the cheapest energy
Just like any market, the electricity-market is controlled by supply & demand. In places where there is a lot of demand for electricity but little supply the price per kW/h is high, and in places with a surplus of energy but with little demand the price is low. The excess electricity can often not be stored, so producers are forced to sell at whatever price the market is willing to pay for it - which is very low. Miners don't care about anything except being profitable, so they are naturally guided towards getting the cheapest production cost per Bitcoin as possible. With a declining Bitcoin cost this has miners scurrying to locations where the electricity is cheap enough in order to produce Bitcoins profitably.
Places with a surplus of electricity are often situations where the electricity is generated by things like hydro-electric powerplants, geo-thermal plants and even nuclear powerplants. These plants are not easy to adjust and in many cases these plants provide a constant high amount of electricity which far exceeds the demand for it in the area. As a result many of these locations are proving to be the world's cheapest source of electricity for Bitcoin miners.
Some examples:
Iceland: As much as 90% of the country's energy might currently be used for cryptocurrency mining purposes. The country's energy production is primarily renewable, relying heavily on hydro-plants and geothermal plants that create electricity by using the volcanic heat underneath the island. The country's cold weather further makes it ideal since this helps significantly in cooling the mining equipment.
Sweden & Norway rank high as well for similar reasons: the cold weather and abundance of hydro-power
Canada's VC and Quebec area's have some of the cheaper electricity around, coming from hydroplants. The cool weather also makes it ideal for mining purposes and Hydro Quebec, one of the local hydro-plants has already announced it cannot fulfill the demands of the local bitcoin miners anymore due to the popularity of mining.
Russia is notorious for it's energy surplus and counts a multitude of hydroplants as well as nuclear energy facilities. Again the cold weather plays a role, and notably Siberia seems to draw miners.
The USA also has cheap electricity thanks to renewable energy. In Wenatchee in Washington state it is reported that 12 of the biggest mining farms in the USA are located there, due to it's low cost of electricity.
China is where a lot of mining happens. A lot of mining takes place in the Sichuan province, which is a remote, mountaineous and sparsely populated area of China where the electricity prices are cheap due to overabundance. Though the country uses a lot of coal energy, a lot of Bitcoin mining is once again done through energy generated by hydro-electric dams.
There's more examples you can find too if you google for it. Like Hydrominer who is working with two hydroplants in the Swiss Alps in order to provide cheap electricity for Bitcoin miners. Or this story about Paraguay where they are contemplating focusing more on Bitcoin mining because of it's cheap hydro-energy, in order to uplift the country out of poverty.
Most estimates on Bitcoin mining usage are simple estimates and rarely take into account where the energy is coming from and what kind of energy it is. The truth of the matter is that environmentally unfriendly power sources such as oil and coal are generally simply too expensive to be used for mining cryptocurrencies. The energy that does get used is cheap and abundant energy that would otherwise (more or less) go to waste anyway. And because of the cheap cost of this electricity, more polluting kinds simply cannot compete. It's hard to estimate how much of Bitcoin's mining is 'green' energy and how much isn't, but it's a lot more nuanced than what the mainstream media makes it out to be.
Take a look at these great videos by Bitcoin programmer Jimmy Song and Bitcoin-guru Andreas Antonopoulos when they talk about Bitcoin's energy usage and it's impact on the environment:
