How to Mine Cryptocurrency with Renewable Energy: Costs, Benefits, and ROI
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Summary
As the controversy around the environmental impact of cryptocurrencies such as Bitcoin continues to make headlines, miners and investors are exploring the possibility of mining cryptocurrencies using only renewable energy to reduce the industry’s carbon footprint.
This article examines the economics of such an approach, analysing the challenges, benefits and real-world examples of green mining operations to determine whether eco-friendly crypto mining could be both profitable and a viable business model.
Factors impacting profitability include the initial capital expenditure vs operating expenses, the volatility of both the price of Bitcoin and energy costs, and the efficiency of mining rigs, with the key metric being the cost per kilowatt-hour of energy compared to the value of Bitcoin mined.
Crypto mining companies such as Bitfarms, Hive Blockchain and Square (now Block) have demonstrated that it is possible to mine crypto using only renewable energy sources and remain profitable.
However, there are challenges to overcome, including the intermittency of renewable energy sources and the geographic viability of renewable energy sources for mining operations.