Since 2019, fossil fuel costs have continued to rise, forcing the mining industry to recalculate the triangle of "electricity cost, stability, and compliance." On one hand, the cost-effectiveness of clean energy sources like hydropower, photovoltaics, and wind power continues to improve; on the other, energy storage and grid resilience have yet to fully complement each other. To address these concerns surrounding mining costs, we invited ViaBTC Founder and CEO Yang Haipo for an in-depth discussion.

What percentage of Bitcoin mining currently uses clean energy? What is the overall trend?

Yang Haipo: The proportion of clean energy in Bitcoin mining is steadily increasing. Especially since 2019, as fossil fuel costs have continued to rise, more and more miners have begun turning to cost-effective clean energy. According to user samples collected by ViaBTC, approximately 40%-50% of miners still use fossil fuels, while the rest primarily use clean energy. Hydropower is the most common clean energy source, accounting for 30%-40%. Other new energy sources, such as solar, wind, and associated gas, account for less than 20% combined, but this figure is gradually increasing.

Miners who still rely on fossil fuels are primarily concentrated in resource-rich regions. For example, Texas, with its well-developed power grid and infrastructure and abundant natural gas reserves, has attracted many miners to build their own mines. Meanwhile, regions with abundant fossil fuels but high costs for exporting electricity tend to utilize excess local electricity for greater economic benefits through mining.

Hydropower has always been a favorite clean energy source for miners. Regions like Russia, Canada, South America, and Africa all boast abundant hydropower resources. For example, leading Russian mining companies are primarily located in Siberia, where hydropower is plentiful. Countries like Paraguay, Bhutan, and Ethiopia have also attracted large mining companies like Bitdeer and HIVE Digital to partner with them on mining operations thanks to their large hydropower stations.

Solar energy has garnered significant attention in recent years, but due to energy storage issues, it still relies on a "photovoltaic + grid" approach to ensure stable power supply. The use of associated gas from oil and gas fields for power generation is also common in countries like Canada, Russia, Kazakhstan, and Argentina. As for nuclear energy, its application in Bitcoin mining remains limited due to high infrastructure construction and overall costs. Emerging areas like waste-to-energy, while relatively costly, are also seeing pilot projects due to financing and policy subsidies.

Overall, the global energy mix for Bitcoin mining is accelerating its transition to cleaner energy sources. While the infrastructure for some new energy sources is not yet fully mature, the trend of a steadily increasing share of clean energy is clear.

What are the biggest challenges in advancing renewable energy mining?

Yang Haipo: Currently, electricity costs have become the largest ongoing expense for miners, often accounting for 30% to 70% of revenue. Therefore, for miners, the core decision-making process lies in electricity cost and power supply stability. Bitcoin mining is highly sensitive to both costs and revenue: on the one hand, long-term stable operation is required to ensure profitability, and on the other hand, electricity prices must be kept as low as possible to maximize net profits.

Fossil fuels have long held a prominent position due to their stable power supply and mature supporting systems. However, the challenge is rising costs. Since 2019, rising coal prices have driven up thermal power costs, with thermal power management fees increasing by 50% or even doubling in many regions. This is also a key factor in the recent increase in the share of clean energy.

Among clean energy sources, hydropower is the most mature, with well-developed infrastructure and extensive experience in large-scale utilization. However, hydropower resources are constrained by geographical conditions, with high-quality resources relatively concentrated. Furthermore, due to climate influences, there are variations in wet and dry seasons. In the early years, there was even a phenomenon of "following the power," where miners would migrate to areas with more abundant power resources during dry seasons. Fortunately, hydropower has a relatively mature energy storage method—pumped storage—which is currently the world's largest energy storage method. For example, some hydropower stations in Siberia, Russia, can store water year-round to maintain long-term balance.

Photovoltaic and wind power are developing rapidly and have been implemented in some scenarios. However, achieving 24/7 uninterrupted power supply remains difficult, resulting in a high reliance on the grid and energy storage. While their cost per kilowatt-hour is lower than traditional energy sources, their energy storage costs are relatively high. For example, in regions with well-developed photovoltaic infrastructure, the price of photovoltaic electricity is approximately 70% of that of thermal and hydropower, but the cost of supporting energy storage is roughly double that, significantly increasing overall costs. For example, in Latin America, large-scale wind power costs approximately $0.018–$0.035/kWh, while photovoltaic power costs approximately $0.017–$0.023/kWh. At the practical level, some miners can expect photovoltaic power prices of approximately $0.035–$0.042/kWh, while the corresponding energy storage price is approximately $0.085/kWh. Therefore, miners currently often use a combination of photovoltaic power and industrial power to control overall costs.

Policy influence is also crucial. Most countries are promoting grid upgrades and the integration of renewable energy through fiscal subsidies, national funds, or dedicated investments. Examples include Canada's "Smart Renewables and Electrification Pathway" program, Russia's capacity agreement subsidies, and the active investment in solar and wind power by the Saudi Public Investment Fund, the Qatar Investment Authority, and Oman's National Energy Company. It is foreseeable that with policy support and capital inflows, new energy infrastructure will mature.

Will more mining companies invest in renewable energy mining in the future? What are the necessary conditions to support this?

Yang Haipo: I'm optimistic about this trend. The global power system is undergoing a green transformation, and Bitcoin mining, as a highly cost-sensitive industry, is poised to embrace this change even earlier. In recent years, we've seen an increasing number of collaborative efforts: many renewable energy power generation companies are partnering with mining companies to absorb excess electricity and reduce payback periods. For example, Marathon Digital in the US acquired a 114 MW wind farm in Texas to absorb wind power that would otherwise be abandoned during off-peak periods. Last year, Canada's Hive Digital planned to build a 100 MW hydropower data center in Paraguay. And Riot Platforms in the US invested in Reformed Energy, a waste-to-energy company that uses plasma gasification technology to convert municipal waste into electricity.

In the future, I believe three objective factors will be key drivers: First, economics. When renewable energy completely outperforms fossil fuels in terms of full-cycle costs (including energy storage), miners will have no reason to continue relying on coal-fired or gas-fired power, and new Bitcoin computing power will naturally shift toward clean energy. Second, infrastructure and energy storage. Only when the power grid has stronger dispatch capabilities and energy storage costs drop significantly will miners be able to maintain consistent operations year-round, eliminating the need for a "backup" of fossil fuels.

Finally, there are policy signals. When major countries introduce clear incentives, such as green tax breaks, clean electricity subsidies, or explicit requirements for computing power to use clean energy, these can become a game-changer. In fact, we've seen many oil-producing countries in the Middle East recently unveil carbon neutrality ambitions: Saudi Arabia aims to achieve 50% renewable energy by 2030, the UAE proposes 32% by 2030, and Kuwait, Oman, and Qatar are also accelerating the development of photovoltaic and wind power plants. These policies and investments will not only accelerate local energy transitions but also provide new development opportunities for Bitcoin mining companies.

Overall, as economic, technological and policy conditions gradually mature, I believe that more and more Bitcoin mining companies will choose renewable energy in the future.

Large mining companies can achieve lower electricity costs through policy or capital support. Will this also lead to a greater concentration of global computing power? Will the difficulty of mining continue to increase for small and medium-sized miners?

Yang Haipo: It's undeniable that large mining companies, leveraging their capital advantages and policy subsidies, are able to access cheaper energy. For example, they can directly invest in power generation facilities to obtain electricity at prices below the grid market, or sign long-term power purchase agreements with energy companies, thereby locking in lower electricity costs and greater operational certainty. Furthermore, listed mining companies like Marathon can leverage capital market financing to invest heavily in the latest generation of high-efficiency mining equipment and clean energy projects.

These advantages enable them to sustainably expand amidst industry competition. According to data from TheMinerMag, in January 2024, 19 publicly listed companies with self-mining operations accounted for 22% of the total Bitcoin output on the network. This year, this figure has risen to around 30%, reflecting the increasing share of large mining companies in the overall network computing power.

Small and medium-sized miners do find it difficult to compete with these vertically integrated large mining companies on electricity costs, making participation more difficult. However, this does not mean they will be completely eliminated. Within the ViaBTC mining pool, many users still operate with a small number of mining machines, leveraging the pool to generate sustainable cash flow. For example, at an electricity cost of $0.06 per kilowatt-hour, the current break-even price for mainstream mining machines, including common home mining machines, is approximately $50,000-$70,000, still below the market purchase price of Bitcoin, which is $100,000. Furthermore, the flexibility and creativity of small and medium-sized miners are also at play: for example, in some high-latitude regions, some miners use waste heat from their mining machines for home heating, improving energy efficiency and indirectly reducing overall costs.

As mining costs continue to rise, what role do you think mining pools will play in the future?

Yang Haipo: If the capital and energy advantages of large mining companies drive the industry's scale, then the existence of mining pools ensures that Bitcoin mining remains open and decentralized. First, the emergence of mining pools has significantly lowered the barrier to entry for Bitcoin mining. In the early days, mining was almost exclusively for technically savvy individuals, who had to configure software and even write their own programs. I personally understand this, as I wrote the code for ViaBTC myself, and I'm well aware of the various barriers to entry in the early days of mining. Today, simply connecting your mining rig to a mining pool allows you to easily participate in mining. Whether you're a large-scale mining company or an individual miner with just one or two rigs, mining pools can help you generate stable returns.

Bitcoin block generation is inherently a probabilistic event; the greater the hashrate, the higher the probability of receiving a reward. Without mining pools, small-scale miners would struggle to mine blocks within a reasonable timeframe, ultimately forcing them to exit the market and leading to network centralization. ViaBTC's PPS+ revenue distribution model addresses this issue, ensuring fair revenue sharing among participants of all sizes, thereby maintaining broad network participation and security.

It's important to emphasize that while mining pools connect to the computing power of a large number of users, there's no so-called "decentralization crisis." Reports claiming that the top mining pools control the majority of the Bitcoin network's computing power, triggering a decentralization crisis, are a common misconception. Mining pools don't own the computing power themselves; it belongs to the miners, who can switch connections at any time. If a mining pool acts against the interests of miners, miners will immediately transfer computing power, which is crucial for the healthy operation of the industry.

ViaBTC open-sourced its Bitcoin mining pool code back in 2021, including mining services, protocol implementation, and support modules for multiple merged-mining currencies. Any interested miner can optimize and develop their own mining services based on this code. I strongly support open source technology and hope to promote the healthy development of the community through concrete actions, allowing more people to participate and enjoy the benefits of Bitcoin mining.

In short, whether you're a miner with high or low hashrate, familiar with mining technology or not, we want everyone to be able to easily join and reap the rewards. Mining pools are not only the infrastructure for aggregating hashrate and distributing revenue, but also a crucial way to drive the Bitcoin network towards openness, transparency, decentralization, and a win-win environment.