Bitcoin miners say energy efficiency and regulatory certainty are crucial for the industry’s success

Bitcoin mining is often criticized as an imperfect process due to its energy expenditure, but major firms in the industry are trying to maximize efficiency and sustainability while seeking regulatory clarity.

In a dimly lit room at the FTX and SALT’s Crypto Bahamas event, some of the largest crypto miners in the world took the stage to discuss the future of the nascent but growing industry in the “Crypto Mining: Maximizing Efficiency and Sustainability” panel.

Crypto miners are looking to improve their market through efforts ranging from improving hashrate efficiency, which is the amount of power that a machine requires to produce a bitcoin, to data mining centers becoming more specialized and optimized for lower energy consumption, Marco Streng, CEO and co-founder of Genesis Digital Assets, said at the event.

Computers that mine bitcoin are 58 times more efficient than they were eight years ago, according to a report by the Bitcoin Mining Council. In addition to machines becoming more efficient, the engineering of the facilities and the sources of power have become much more efficient, which improves the productivity of an individual bitcoin mining computer, Mike Levitt, co-chairman, co-founder and CEO of Core Scientific, said.

Some miners are even using excess heat and converting it into close to 100% heat-generated energy, which would otherwise be wasted but instead is being channeled into energy, Streng said.

“It’s clear now that miners are converging toward renewable sources,” Streng said.

Out of all the energy that gets generated and used in the U.S., about 65% was wasted in 2021, according to a chart by Lawrence Livermore National Laboratory, a research facility funded by the U.S. Department of Energy and UC Berkeley.

Miners can be a solution to the problem of unconsumed energy, Streng said.

Jaime Leverton, CEO of Hut 8, agreed.

“By working together with a local power grid, we actually are a stabilizer,” Leverton said.

The amount of energy that it takes for Bitcoin to produce $1 billion worth of value is significantly less than the amount of energy it takes for something like an airline to produce $1 billion worth of value, Brian Brooks, CEO of Bitfury, said.

A key point that’s hurting the crypto mining industry right now is the lack of regulatory clarity, all the panelists said.

“Once we get [regulation], we think the pace of innovation should pick up because we’ll know the rules of the game,” Levitt said. “The efficiency of the hardware has improved tremendously, the efficiency of power provision and the free markets have directed us to be cognizant of how we bring power the right way. “

Once crypto miners understand a regulatory framework, it’ll help drive further efficiencies because the industry participants will know what path they should be taking, Levitt said.

“All of us are focused on the issue of power provision,” Levitt said. “We want to bring our costs down, but the fact of the matter is we are helping utilities and others bring more renewable power. Renewable power is less expensive power, and that wasn’t true 10 to 15 years ago; but it is now.”

Levitt and other panelists agreed it’s more attractive to run an energy-efficient business, to both shareholders and from a financial perspective. “We are completely aligned as an industry to have those goals coincide. They’re completely consistent. A lot of people think they’re mutually exclusive and it’s the opposite,” he said.

While the miners are optimistic about the impact of crypto mining as renewable energy options grow, some governments are looking to clamp down on miners’ polluting power consumption.

Earlier this week, the New York State Assembly proposed a two-year-long “moratorium” on bitcoin mining powered by fossil fuels. Although it hasn’t passed, it could clearly impact New York’s active mining industry, which is one of the biggest in the country.

Meanwhile, Fort Worth, Texas, became the first city in the United States to announce it’ll mine its own bitcoin. The city plans to put three Bitmain Antminer S9 mining rigs in its climate-controlled City Hall, which will run 24/7.

Bitcoin has survived – and thrived – since 2008 and created an industry worth over a trillion dollars because it’s solving a fundamental problem for humans, Leverton said. “It’s creating financial sovereignty for billions of people and global financial access for everyone on the planet.”