Ecology and decentralization: how a green trend can make a bitcoin network more stable – Bits Media

How the decentralization of cryptocurrency is associated with ecology and alternative energy sources? In fact, there is no direct correlation here. However, there is an indirect relationship.

What is decentralization

Decentralization is the lack of a single center decision -making. In relation to historically, the first cryptocurrency is understood primarily the possibilities of blockchain technology, namely, that transactions on the network are confirmed not by the sole and monopoly agent, like in banks, a different participant. Respectively, The more users will be, capable of confirming translations (In the case of bitcoin and in general with POWConsus-miners), the more decentralized and stable the whole system will be.

It is worth considering, that Bitcoin's prey does not exist on its own. It is tied to electricity. Most generating companies in the world are centralized. On the one side, They cover wide demand for relatively low energy prices (Although not everywhere). On the other, If some unforeseen situation occurs, then losses will incur many market participants, associated with a large central supplier.

In a modern unstable political situation and during military conflicts, infrastructure facilities are often subjected to attack, to which the electric power industry applies. Destruction can lead to that, that the country becomes, in fact, paralyzed. This also affects the stability of the cryptocurrency network, whose miners use electricity. If the system were decentralized, then it would be more difficult to completely disable it. Individual nodes would continue to function. Including thanks to alternative power sources.

How is the decentralization of electric power industry associated with the decentralization of bitcoin? 

The effect of energy decentralization on BTC

If the electrogevation becomes completely decentralized, That is, everyone will be able to get it on their own, then he will be able to do it himself, eg, mining. Of course, Even if the Green Trend continues to gain momentum, Not everyone will minimize, and you, what will become, can pay attention to altcoins. But bitcoin remains as a currency with the greatest capitalization, So is one of the leaders in the mining segment of the SHA-256 algorithm. At the same time, the Bitcoin dominance index over the past year did not fall below 38%, Despite the growth of capitalization of popular cryptocurrency platforms and Defi projects.

Source: tradingview.com

So with even greater popularization of the "green trend" and alternative energy wishing to extract BTC, Using your own sources, will increase. Market experts note, that in addition to alternative sources, An “hard -to -use electricity” will be increasingly involved.

And once yes, then bitcoin will become an even more decentralized system, what is he now. So, We answered the first question. What about implementation in practice?

To get access to electricity more people, you need to organize access to sources. Interesting, that according to experts, Large players, with industrial access to water resources, Corring or gas are not leading mining agents, since their activities in the mass are associated with other methods of monetization. What remains? Renewable energy sources: wind, solar energy and the like. The amount of energy generated will differ from the location. Besides, Even in the same climatic belt, the stream of electricity will not be stable. The advantage may be one, who lives in a private house or has land in property. But now, not everyone can afford mining, So nothing will change in this regard.

The market of solar electric power industry

In the USA 2020 year near 3,7% households had solar panels. And the percentage is growing. According to the analysis of Princeton University (Princeton University), to 2024 the amount of electricity used from the Sun will increase five times compared to 2020 year, And to 2030 And all ten.

Positive dynamics forms in China. The Celestial Empire has long been a leader in the field of solar electricity. Given the difficult environmental situation in the PRC, The authorities are going to 2030 year to increase generating capacity to 1,200 gt. At the same time, experts of the International Economic Agency (Mea) consider, that the result will be achieved earlier - in 2026 year.

There are not many solar power plants in Russia - 0,78% from the power of the entire electric power industry as of the beginning 2022 of the year. In a positive scenario of Russia's energy strategy before 2035 It is planned to increase this indicator to 3-5%.

But all this is planned at the state level, that is, does not contribute to decentralization in any way. And how are things going with a private initiative?

Here you can turn to the statistics of the US Energy Information Management (Energy Information Administration). In accordance with it, the solar panels installed only 5,7% households with income more than $ 150,000, and 1,1% With income less than $ 20,000. What is it talking about?

Otherwise, In terms of decentralization, bitcoin will not much increase the share of the already involved large players on the network. On the other side, In any case, this will make the network more stable.

Besides, It is worth noting the study, held by Cambridge University (University of Cambridge). According to his data, Already now 26,3% electricity, bitcoin, comes from renewable sources. On coal, gas and other fossil sources
Almost two -thirds have to account - 62,6%.

Statistics are not in favor of those, who mines electricity "green", but their share is already significant. Considering the cycles of prolonged bearish trends in the market with falling rates, Already, many industrial miners are paying attention to alternative or so-called secondary sources of electricity, to reduce costs and survive the crypto winter. This is also supported by statistics on rising electricity prices in the US industrial sector., sides, which has remained among the leaders in BTC mining for a long time.

Source:
hashrateindex.com

Environmental Impact on BTC Decentralization

Does this mean, that in the future the system will become much more decentralized in terms of energy sources? Most likely not. Statistics show: The trend towards solar power generation is primarily in a centralized system. Among private users, few can afford this yet.. Although the green trend is gradually increasing the share of private energy sources in Bitcoin mining, their share will not prevail in the near future. But the presence of different participants with their own sources in any case benefits the stability of the network.. It is also worth considering the rising costs for the miners themselves (soaring electricity costs, periodic bearish trends in the crypto market and so on), as a result, in the long term they will be forced to look for alternative and cheaper ways to generate electricity.

This material and information in it is not an individual or other other investment recommendation. The view of the editorial office may not coincide with the opinions of the author, analytical portals and experts.