Despite a massive performance during the first quarter of 2021, Bitcoin has been under pressure since April, mainly due to regulatory concerns and also critics related to energy usage, necessary to keep the largest cryptocurrency up and running. Even though his company announced a $1.5 billion stake in Bitcoin in February, Elon Musk, Tesla’s founder and CEO, had turned from a Bitcoin supporter to a big critic.
His 180-degrees turn led to the creation of a new Bitcoin Mining Council, to improve the cryptocurrency’s sustainability, as BBC had recently reported. This occurred following a meeting that took place between Elon Musk and some of the largest Bitcoin miners, showing that the industry is willing to make changes and adapt each time it is necessary.
Bitcoin energy consumption – a long-term issue?
Based on a study conducted by the University of Cambridge, the Bitcoin blockchain consumes more than 120 Terawatt Hours (TWh) each year, a figure perceived as very high, considering the cryptocurrency is not yet used at a global scale as legal tender. The concerns are even more accentuated by the source of energy, with most of it being generated using fossil fuels.
Developments in the cryptocurrency industry have accelerated over the past two years. Derivatives based on crypto led to the appearance of futures, options, and other derivatives that can be traded on high-profile platforms like Global Solution.
Despite the high potential of digital assets in an economy dependent on technology, multiple improvements still have to be made and the new Bitcoin Mining Council aims to correct some of them.
Bitcoin Mining Council to report on renewable energy usage
Now that North American bitcoin miners have agreed to promote transparency in energy usage, the wider public should have access to more information on the topic. Alongside Elon Musk, Michael Saylor, CEO of MicroStrategy, also had an important contribution to the creating of the new council.
According to his Twitter account, the role of the Council is the standardize energy reporting and ultimately ensure transparency, as well as sustainability initiatives. Argo Blockchain, Blockcap, Core Scientific, Hive Blockchain, or Galaxy Digital are some of the miners part of the new council.
Tesla announced the suspension of electric vehicles using Bitcoin, until the mining operations will be conducted solely with renewable energy. Even though that’s achievable in the long run, the most difficult part would be to convince miners in other regions of the globe to follow on the same path.
Can Bitcoin price get past this hurdle?
Faced with all the critics and negative headlines, Bitcoin was unable to remain near the all-time highs. For the first time since the beginning of 2020, a 50% drawdown occurred, yet cryptocurrency experts believe that’s not necessarily a sign suggesting the bull run ended.
Investors dumping BTC tokens and traders selling short on Global Solution and other trading platforms had been keeping the price subdued. More recently, El Salvador announced a new law that makes Bitcoin a legal tender, which had been reviving short-term optimism.
However, since it’s a small country, that is not enough to generate a massive spike in valuations. The new Bitcoin mining council could have a meaningful contribution to how the largest cryptocurrency will operate in the future.