decrypt.co
A new Bitcoin mining pool set to launch in 2023 is aiming to provide an eco-friendly alternative to the industry’s notoriously high carbon footprint, using carbon offsets to reduce its environmental impact and reward miners who use renewable energy.
British-owned Pega Pool, launching in Q1 2023, is opening its offering to Bitcoin mining clients regardless of their renewable energy usage—but will reward clients that mine using renewables with a 50% reduction in their pool fees, from 2% to 1%.
In addition, a portion of the pool fees from clients using non-renewable energy will be allocated to carbon offset schemes that plant trees to reduce the environmental impact of mining activities.
Bitcoin mining’s fossil fuel problem
The Bitcoin mining industry is facing increased scrutiny over its use of fossil fuels. According to a September 2022 study by the Cambridge Centre for Alternative Finance, fossil fuels account for almost two-thirds (62.4%) of Bitcoin miners’ electricity mix.
Between 2020 and 2021, Bitcoin’s average emission intensity increased from (491.24 gCO2e/kWh) to (531.81 gCO2e/kWh), suggesting that the sustainability of the electricity mix has “deteriorated,” according to the study’s authors.
Bitcoin’s energy consumption and environmental impact has resulted in a global pushback from countries and companies. In May 2021, EV firm Tesla abandoned plans to accept payment for its products in Bitcoin, with CEO Elon Musk highlighting his concern over the “rapidly increasing use of fossil fuels for Bitcoin mining.” The following month, China cracked down on Bitcoin mining, citing its commitment to "carbon neutrality" at the United Nations General Assembly in 2020.
That’s served to drive awareness and take-up of sustainable Bitcoin mining, with some advocates arguing that Bitcoin could actually help to accelerate the transition to renewables.
Crunch time
With the crypto market facing a prolonged slump, Bitcoin miners are feeling the squeeze in their profit margins as Bitcoin mining difficulty has soared and the cryptocurrency’s price has plummeted.
That’s left Bitcoin miners hunting for cost-effective options that offer a stable income stream; something that Pega Pool is seeking to address with reduced pool fees for miners.
Clients that join Pega Pool’s early access waiting list will receive a permanent 50% reduction in pool fees, while clients that are accepted for beta testing will see 0% pool fees during the beta stage and a permanent pool fee of 0.5% post-launch. The pool also operates using a competitive pay per share plus (PPS+) revenue model.
Although the only clients currently mining with Pega Pool is its sister company Pega Mining and a handful of beta testers, it’s already the 13th largest pool in the world by hashrate, according to BTC.com; with miners redoubling their focus on sustainability and stable profits in the midst of the current bear market, its share looks likely to grow.