11/10/2023 0 Comments

1. Bitcoin Mining Potential Highlighted In Top Science Journal

A new peer-reviewed research paper has emerged, shedding light on the potential symbiosis between Bitcoin mining and renewable energy initiatives. Dennis Porter, CEO and co-founder of Satoshi Act Fund, a non-profit educational organization dedicated to informing policymakers and regulators about Bitcoin mining’s benefits, and president of Satoshi Educate, shared his insights via X, underscoring the importance of the study. He remarked, “JUST IN: New peer-reviewed research states that Bitcoin mining ‘could serve as a bridge to foster investments in renewable energy.’”

Top Science Journal Praise Bitcoin Mining’s Potential

Murray Rudd, Science Advisor for Satoshi Educate, provided a comprehensive overview of the paper, titled “From mining to mitigation: how Bitcoin can support renewable energy development and climate action.” Published in the esteemed ACS Sustainable Chemistry & Engineering journal, which holds a notable 14th rank out of 139 in environmental science-chemistry journals, the paper is expected to be a significant contributor to future research in the field.

The research team, including a PhD student from Cornell University and experienced professors from Western and Cornell, led by Fengqi You, has presented a paper that is “poised to be highly cited”, offering “valuable insights” into the role of BTC mining in renewable energy development, according to Murray.

The paper addresses a critical question: Can Bitcoin mining increase the economic viability of renewable energy projects in the US? According to the findings, the answer is a definitive yes. Utilizing national data, the research method involved assessing the profitability of new solar and wind projects, indicating a real-world approach backed by data from the National Renewable Energy Lab.

Despite its complexity, the essence of the research is clear: The study evaluates capital and operational expenditures against power output, focusing on 58 pre-commercial renewable facilities to determine their profitability before grid hook-up.

Key findings suggest that BTC mining can indeed attract private investment into the renewable energy sector. Furthermore, the authors present three policy recommendations.

Firstly, to adopt flexible decarbonization strategies that include mining; secondly, to encourage the use of clean energy sources for Bitcoin mining, supplemented by carbon credits as incentives; and thirdly, to maximize location-specific renewable energy integration, reinvesting profits into further renewable infrastructure.

The paper concludes with a powerful statement, suggesting “Bitcoin mining, an activity often criticized due to its energy-intensive nature, could serve as a bridge to foster investments in renewable energy”

Rudd’s personal take highlights Bitcoin’s potential in accelerating the adoption of renewable energy, noting that the study might even underestimate the benefits due to its reliance on historical data on market prices. He emphasizes the need for further research, particularly on the long-term contributions of Bitcoin mining to the financial viability of renewable energy facilities.

Additionally, Rudd points out the need to consider the business structures of miners and renewable energy operators and how they collaborate. At Satoshi Educate, efforts are underway to explore similar models, particularly focusing on landfill methane mitigation, aiming to further elucidate the impacts of mining on the environment.

Remarkably, this paper could be another major step towards rectifying the bad reputation of Bitcoin mining.

At press time, the BTC price rose above $37,000 after breaking out of the ascending trend channel on the 2-hour chart.

2. Bitcoin Miners Have Room to Increase Renewable Energy Use

One of the most frequently mentioned criticisms of bitcoin mining is that it’s energy-intensive. Making that matter worse is that the industry is a massive consumer of fossil fuels, arguably inviting that criticism. Indeed, data supports the notion that there’s ample room for bitcoin miners to increase usage of renewable energy.

Some companies are getting that memo. As the groups’ green energy consumption increases, assets such as the Invesco Alerian Galaxy Crypto Economy ETF (SATO) could benefit. The equity sleeve of the fund’s portfolio heavily tilts toward cryptocurrency miners. That’s an asset class that isn’t highly correlated to crypto prices. But it’s one that’s also drawn the ire of policymakers and regulators for elevated dependence on fossil fuels.

Greenfield of Green Energy Opportunity for SATO

Data confirms the point that the bitcoin mining industry, including SATO member firms, have plenty of room to improve renewable energy consumption. According to BanklessTimes.com, two-thirds of the energy consumed by bitcoin miners is fossil fuels, including coal and natural gas.

“The choice of energy for Bitcoin mining has become a topic for debate. There is increasing evidence indicating that a significant amount of Bitcoin mining relies on fossil energies. This information is causing concerns about the impact of Bitcoin and how it could contribute to climate change,” noted analyst Alice Leetham.

Some bitcoin miners are awakening to the benefits of broadening use of renewables. If nothing else, by boosting use of green energy, cryptocurrency miners can appease regulators while reducing criticism of their energy choices. Additionally, reduced dependence on fossil fuels could, over time, boost profitability in the industry.

Data indicates some operators are already seizing the benefits of renewables. Thirty-seven percent of the energy consumer by bitcoin miners is derived from hydro or wind power, according to BanklessTimes. Nearly 13% is either nuclear or solar. Those percentages aren’t staggering, but they imply room for growth and that some miners are taking seriously environmental stewardship.

Bitcoin mining companies, investors and enthusiasts have a shared responsibility to lead the industry towards friendly practices. It is essential to invest in energy infrastructure, promote research and development of energy technologies and advocate for strict regulations. These measures are crucial for reducing the impact of Bitcoin mining.

3. While the market waits for a spot bitcoin ETF, public miners offer institutional exposure

The prospect of an approved spot bitcoin exchange-traded fund (ETF) in the U.S. is driving notable enthusiasm from investors. A rumor indicating that BlackRock had received approval to offer such a product drove a bitcoin price spike and $100 million in liquidations last month. And eventual approval for BlackRock or other prospective applicants is expected to propel the bitcoin price to new highs.

The enthusiasm is derived from the fact that such a product would usher in institutional investment, offering a regulated and friendly way to achieve bitcoin exposure without the responsibility of holding the asset directly. But many may be surprised to learn that such a financial product already exists, offering institution-friendly exposure to the world’s best performing asset over the course of its lifetime.

That exposure can already be found in shares of publicly-traded bitcoin miners.

To explore this offering, and the role that the largest mining operations can play for investors as they await more financial acceptance of digital assets, Roundtable anchor Rob Nelson spoke with Matt Schultz, the executive chairman and co-founder of CleanSpark (CLSK).

CleanSpark has made significant strides in the bitcoin mining industry, becoming on if its leading players while drawing upon 91% clean energy sources. In their conversation, Schultz and Nelson touched on a critical juncture for potential investors: how to get started in Bitcoin without being overwhelmed by the complexities of cryptocurrency.

Schultz emphasized the importance of education before diving into the digital currency pool, whether through direct crypto investment or exposure to crypto-focused stocks. He suggested that newcomers take the time to understand Bitcoin’s fundamentals and its broader implications, such as its potential to stabilize power grids. He recommended resources like Coinbase, the leading crypto exchange in the U.S., for beginners to educate themselves, stressing that knowledge is the precursor to investment.

Schultz also addressed the benefits and risks of various investment methods, from ETFs with their management fees to the practice of dollar-cost averaging directly into bitcoin to mitigate its notorious volatility.

Nelson resonated with the strategy of starting small and simple, like using a MetaMask wallet to hold assets personally, and pointed out that there are straightforward methods available for those willing to take the plunge. Schultz and Nelson’s discussion concluded with a recognition of the traditional financial world’s growing acceptance of bitcoin and its miners, with a recent nod from Jamie Dimon’s bank as a testament to CleanSpark’s industry prowess.

Schultz’s parting words were an open invitation for future discussions, signaling CleanSpark’s eagerness to remain at the forefront of the conversation on bitcoin mining and investment. This exchange not only provided a roadmap for those looking to invest in bitcoin but also showcased the growing intersection between traditional finance and the world of cryptocurrency.

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