Report: The impact of block reward halving on mining profitability may prompt Bitcoin miners to look for more sustainable energy sources

PANews reported on April 16 that Cointelegraph reported that the upcoming Bitcoin halving may make the Bitcoin network more environmentally friendly and use more sustainable energy. As the Bitcoin block reward decreases from 6.25 BTC to 3.125 BTC, coupled with the rising Bitcoin hash rate, the profitability of mining companies may be affected. Fineqia International research analyst Matteo Greco said this may prompt miners to seek greater capital efficiency through sustainable energy sources. Greco wrote: “This dynamic forces mining companies to optimize capital efficiency and find cheaper sources of electricity, thereby increasing the use of renewable energy in Bitcoin mining.”

Bitcoin is often criticized for its high energy consumption and reliance on fossil fuels. However, according to the monthly research report "Bitcoin ESG Forecast" written by Daniel Batten, managing partner of CH4 Capital, by the end of January 2024, more than 54.5% of the Bitcoin network's energy consumption will be provided by renewable energy. Greco added: “The Bitcoin mining mechanism also incentivizes efficiency improvements, which may be one of the main reasons why the network is becoming more and more sustainable. The Bitcoin mining reward mechanism essentially promotes efficiency improvements at every step, enhancing Improves network security, reduces carbon emissions, and promotes research on sustainable block confirmation methods.”