Shocking New Report: Bitcoin Mining Industry is Heavily Renewables-driven, Accounting for over 74%
- It's official: Bitcoin mining predominantly powered by hydro, wind or solar
- Over 74% of the bitcoin mining network is powered by renewables
- At current prices, the average miner is “highly profitable”
According to the latest report titled, “The Bitcoin Mining Network – Trends, Composition, Average Creation Cost, Electricity Consumption & Sources” by CoinShares reveals that more than 74 percent of the Bitcoin mining is powered by renewable energy, making Bitcoin mining more renewables-driven than almost any large scale industry in the world.
“We show that Bitcoin mining is mainly located in global regions where there are ample supplies of renewable electricity available. And…we calculate a conservative estimate of the renewables penetration in the energy mix powering the Bitcoin mining network at 74.1%, making Bitcoin mining more renewables-driven than almost every other large-scale industry in the world.”
China’s Dominance in Bitcoin Mining Expected to Drop
Per the report, an estimated 60% of global mining happens in China while Sichuan alone produces 50% of the global hash rate. The reason behind this dominance is the ‘Fengshui’ rainy season in the hydro-heavy ‘Yunguichuan’.
As for why Bitcoin’s electricity might be as green as the report claims, a clear trend can be seen among miners opting for areas where hydroelectric power is abundant.
“Bitcoin miners are fairly well distributed across the globe…Looking more closely at their distribution, it is clear that they are predominantly — by volume weight — confined to technologically advanced, relatively sparsely populated, hilly or mountainous regions traversed by powerful rivers.”
Electricity prices here are among the lowest in the world that makes it one of the most attractive global mining regions. However, CoinShares expect it to drop in its next report as miner migrates to Inner Mongolia and Xinjiang.
However, Chinese geographical domination is seeing a steady trend of reduction but its dominance in the hardware manufacturing sector remains as strong as ever and is showing no immediate signs of reduction.
Out of the remaining 40% miners, about 35% is evenly split between Washington, New York, British Columbia, Alberta, Quebec, Newfoundland and Labrador, Iceland, Norway, Sweden, Georgia, and Iran.
The report states currently bitcoin mining uses about 74.1% renewables, down from 77.8% from November 2018.
Cost of BTC Creation Drops, Average Miner “Highly Profitable”
The report further talks about the recent spike in hash rate that is caused by re-starting of the previously shuttered mining green as price makes recovery and deployment of next-generation mining gear.
Since November, the all-in marginal cost of creation, at ¢5/KWh has decreased from about $6,800 to $5,600 approximately. This is primarily the result of lower assumed cooling and overhead costs. This the report suggests at current prices, the average miner is highly profitable. Even with older gear and high-cost producers, miners are currently able to make positive ROI.