Environmental sustainability has emerged as a crucial topic in the ongoing discussions surrounding Bitcoin (BTC) mining. According to an analyst, over fifty percent of the industry’s energy requirements are met through greener and more sustainable sources.
ESG Analyst Challenges CCAF 2022 Report
Daniel Batten, an environmental, social, and governance (ESG) analyst, challenged a 2022 report from the Cambridge Center for Alternative Finance (CCAF) claiming that 37.6% of the energy used for BTC mining was sustainable.
Per Batten’s analysis, the CCAF report failed to consider some critical factors in its calculations. These factors include updated geographical hash rates, flare gas, and off-grid mining.
Batten claimed that the CCAF model underestimated BTC’s green power usage by 13.6% due to these omissions. Meanwhile, the analysis revealed that off-grid mining contributed 10.8% to BTC’s green power usage.
In addition, the new geographical hash rates and flare-gas mining added about 2.8%. Considering these factors, Batten argued that BTC mining uses 52.6% green energy.
This is about 15% higher than the CCAF’s figure in its 2022 report. Interestingly, Batten’s figure aligns more with the Bitcoin Mining Council (BMC) estimate.
The BMC stated that BTC mining utilized around 58.9% of green power in its operations. Meanwhile, ESG investors and environmental groups have disagreed with BMC’s findings.
They prefer to rely on the lower estimates provided by CCAF. This is because they view BMC as an insider in the BTC mining sector.
Hence, it may downplay or exaggerate issues to protect the Bitcoin mining sector. In contrast, these groups view CCAF as an independent and reputable research organization without any apparent hidden agenda, so they trust their estimates.
Barren’s New Report To Increase BTC Adoption
However, Batten argued that the perspective mentioned earlier is biased. BMC’s status as an industry organization grants it greater access to BTC mining-related data.
Batten opined that such access enables BMC to provide a more reliable and precise representation of the current situation. Per the analyst’s assessment, three scenarios could push BTC’s sustainable energy use below 50%.
Firstly, four major BTC mining ventures will secretly employ 100% coal-based energy. Additionally, the sector’s sustainable energy metric may plummet below 50% if ERCOT (Electric Reliability Council of Texas), the electric grid operator in Texas, inaccurately overstated its employment of renewable energy by four-fold.
The last scenario means that Kazakhstan’s global BTC mining hash rate would increase to 20% from 13.2%. According to Batten, his latest discoveries provide environmentally friendly investors with a valid, data-driven rationale to invest in the crypto industry.
Previously, numerous investors refrained from investing in crypto. They argued that Bitcoin mining consumes much power and harms the environment.
Meanwhile, Batten claimed that the new data demonstrates BTC mining’s superior sustainable energy use compared to all other leading industries. This effectively eliminates any hindrance to the widespread adoption of BTC on ESG (Environmental, Social, and Governance) grounds.
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