📈 After a volatile and tumultuous year in 2022, Bitcoin prices are up 75% year-to-date. Valued at a market cap of $565 billion , Bitcoin is the world’s largest cryptocurrency.
💸 Today, there are more than 19 million BTC in circulation, each of which has been mined digitally. Miners solve a complex mathematical problem via computation and are rewarded with freshly minted Bitcoin.
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⚡️ But the mining process is energy intensive. For instance, Bitcoin consumes 110 terawatt of energy each year, amounting to 0.55% of global electricity usage, due to which the environmental impact of this digital asset has come under scrutiny in recent years.
But a recent KPMG report has outlined strategies to reduce the carbon footprint of Bitcoin and make the digital asset more inclusive. Let’s deep dive into the article.
🌏 The exponential rise in BTC prices has attracted miners from all over the world. These miners are incentivized to streamline operations and effectively manage operational costs. Energy is the largest input cost for miners today, which is driving demand for clean energy companies.
🌱 Texas generates the maximum renewable energy among U.S. states producing 136,000 gigawatt hours of solar and wind energy in 2022. As a result, Texas is a popular destination for miners, and accounts for 59% of total BTC hash rate in the country.
👀 Canada-based company MintGreen has partnered with a local energy utility company to offer “Digital Boilers” to convert heat from Bitcoin miners to sustainable heat. MintGreen is also testing a project which will heat 100 residential and commercial buildings in Vancouver.
Bitcoin’s flexible demand load and ability to co-locate near renewable energy sources might accelerate the transition towards cleaner energy solutions.
The lack of regulation surrounding cryptocurrencies has raised concerns that Bitcoin facilitates illegal activities. But a 2022 report from Chainalysis suggests that just 0.24% of crypto transaction volume may be used for illegal purposes.
🔁 Bitcoin can instead act as a major driver for financial inclusion. It can easily facilitate cross border transactions at a cheaper rate, lowering costs for inward remittances and other domestic payouts.
Around 1.4 billion people still don’t have access to bank accounts, a problem which can be solved with Bitcoin.
🤝 Bitcoin is a decentralized network which means it is not governed by a single authority. Due to its vast network of nodes, it is impossible to change protocol rules. Bitcoin’s governance is built into the system by design via rules that are coded within the protocol. It is essentially a system that cannot be misused by a single entity.
Read the full KPMG report here