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Bitcoin has received a lot of criticizing for requiring too much energy for mining. The graph below shows Bitcoin energy usage, and the level keeps on increasing over time.
The graph below compares the amount of energy used in Bitcoin mining and the energy consumption by country. 52.9% and 111.8% of the energy used to powered Bitcoin mining in Australia and the Netherlands.
Elon Musk recently expressed concern citing an enormous amount of fossil fuel is being used to mine Bitcoin.
Is there really no solution to this problem?
Some analysts mentioned that renewable energy would be more suitable for mining Bitcoin. Energy storage is an essential issue for most renewable energies due to the high volatility in the electricity generated. At this time, the intermittent power remaining is considered the most suitable for Bitcoin mining.
Their arguments can be rather convincing. There is another reason to welcome this change, especially in some developing countries where the proportion of renewable energy is more extensive. One of the main reasons that influenced El Salvador's decision to adopt Bitcoin as its legal currency was to reduce the remittance fees. Bitcoin could be an excellent hedging tool against the dollar, considering the inflation in Ethiopia last year exceeded 20%. The more the US does quantitative easing, the more deficient company like Ethiopia will become internationally. However, in such a country that is not yet financially capable, hoarding dollars is a substantial financial burden. Bitcoin, unaffected by the economic policies of the foreign governments, can be new hope for these countries.
In East Africa, almost 90% of all energy production comes from hydroelectric power. This is a great opportunity for Ethiopia to utilize some of its abundant energy for Bitcoin mining. It is said that approximately 2100 BTC per year can be mined by using only 5% of the energy obtained from the hydroelectric power project led by the Ethiopian government. This may be more than good news for Ethiopia, a developing country struggling with inflation in an international climate where ESG management is highly emphasized.
The real question is, can Bitcoin, once considered as the "Energy Hippo," turn to be an economic breakthrough and financial opportunity for developing countries with renewable energy?
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