Download now: Cannabis Cash

The Future of Bitcoin Mining will Be Powered by Clean Energy

Could this Single Stock Determine the Fate of Bitcoin?

Written by Jeff Siegel
Posted June 17, 2021

When Elon Musk took a giant dump on Bitcoin, the cryptocurrency plummeted.

And boy were Bitcoin gamblers pissed!

Those who decided to trade Bitcoin in an effort to “get rich quick” watched the value of their holdings crash in a matter of hours.

Of course, blaming Elon Musk for tanking Bitcoin is like playing the slots and blaming the guy next to you (who just cashed out a big score) for your bad luck.

This isn't a criticism of Bitcoin, by the way, merely an observation of truth. If you’re trading any asset for quick gains, you can just as easily pile up some pretty quick losses if you're not careful.

Interestingly, on Monday, Musk announced that once he can confirm at least 50% clean energy usage by Bitcoin miners with a positive future trend, Tesla will resume allowing Bitcoin transactions.

The price of Bitcoin then soared 13% within 24 hours.

Personally, I love cryptocurrencies.

I love the promise of decentralization.

I love the idea of cutting out so many middlemen who do nothing but get rich off bank transactions because, well, they’re just there. They serve no purpose other than to wet their dirty beaks on your financial transactions.

Interestingly, there still isn’t much data analysis out there on the cost of Bitcoin’s energy consumption versus the cost of energy consumption by traditional banking systems.

There was one study by the digital cryptocurrency firm Galaxy Digital that found Bitcoin’s annual electricity consumption is about 113 terawatt-hours annually, and the traditional banking industry’s electricity consumption is about 263 terawatt-hours per year.

Of course, given that this study was conducted by a cryptocurrency firm, one has to take it with a grain of salt. Still, Jon Miltimore of the Foundation for Economic Education dove into this discussion and offered up a pretty sound analysis of the Galaxy Digital study:

One could reasonably ask, of course, if this favorable comparison would continue if Bitcoin were to become adopted as widely as fiat moneys currently are. The answer appears to be yes for a couple of reasons.

First, the vast majority of electricity Bitcoin uses is consumed in the mining process, so more exchanges of bitcoin will not result in a surge of electricity consumption.

Second, mining reward mechanisms and energy consumption are evolving. Bitcoin mining is complicated stuff, but one thing we know is that only 21 million bitcoins will be produced. Ever. About 18.7 million of these bitcoin have already been mined. Well before the last bitcoin is mined in 2140, however, the mining process is expected to shift. Crypto analysts say the process will likely be more efficient and less exhaustive as rewards for mining decrease and transaction fees play a larger role.

“That could eventually include a switch to a more environmentally-friendly consensus mechanism like proof of stake or another successor to proof of work,” Luka Boškin, CMO of crypto trading platform NewsCrypto, told Decrypt.

Moreover, engineers say the high electricity use becomes less of a concern as more and more mining is done in places where electricity is cheap and clean.

The last part of that quote is worth highlighting because it presents an opportunity for investors to make a few bucks without taking on some of the risks that come with trading Bitcoin.

Changing the Game for Bitcoin Traders

On Monday, an under-the-radar holding company called Captiva Verde (OTCBB: CPIVF) announced that it has proposed to purchase all of the issued and outstanding shares of Crypto One Corp.

Crypto One is a private company that claims it is focused on bringing digital assets onto the clean energy grid, noting that its Bitcoin mining sites have a zero-carbon footprint and the company’s long-term strategy is to be the largest vertically integrated crypto miner with a wholly-owned, 100% renewable energy supply.

While I don't know much about Crypto One or how far along the company is in getting to that 100% renewable energy goal, the truth is the future of Bitcoin could really depend on how quickly companies like this one can scale. And for the record, Crypto One is not the only player in the space looking to clean up the energy and carbon footprint of cryptocurrencies. It's just the only one you can now get access to in the public markets via Captiva Verde.

In addition to this pending Crypto One asset, Captiva Verde also owns real estate and cannabis assets in the U.S., Canada, and Mexico.

While I don’t know what the trajectory of Bitcoin will be, I do know that there’s a lot of money to be made in a variety of ways with cryptocurrency. And I suspect that Bitcoin miners that can lower their energy and carbon footprints will further legitimize the cryptocurrency.

To a new way of life and a new generation of wealth...

Jeff Siegel Signature

Jeff Siegel

follow basic@JeffSiegel on Twitter

Jeff is the founder and managing editor of Green Chip Stocks, a private investment community that capitalizes on opportunities in alternative energy, organic food markets, legal cannabis, and socially responsible investing. He has been a featured guest on Fox, CNBC, and Bloomberg Asia, and is the author of the best-selling book, Investing in Renewable Energy: Making Money on Green Chip Stocks. For more on Jeff, go to his editor's page.

Hydrogen Fuel Cells: The Downfall of Tesla?