Yesterday, announce CEO of Tesla, meaning:

Tesla will resume allowing bitcoin transactions if bitcoin miners use 50% of clean energy.

Here the question appears:

How will Elon Musk know that Bitcoin miners used 50% of clean energy?

Answering this question, Jason Dean, Bitcoin Analyst at Quantum Economics commented:

It is very difficult to get accurate data on the percentage of mining that uses renewable energy sources.

Dean explained that this is due to the divergent nature of the network and the fact that Bitcoin is growing very exponentially.

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So, what about transparency?

To address some of the ongoing concerns about Bitcoin’s energy use, the Bitcoin Mining Council was created to promote transparency around the Bitcoin mining industry.

Dean continued his statement with the following:

As the industry has matured and formalized, it has become clear that social responsibility plays a greater role in miner detection, and we expect this trend to continue and accelerate.

Unfortunately, non-miners cannot join the Bitcoin Mining Council, but the website does provide some transparency about who wants to see the industry.

In the FAQ section of the Bitcoin Mining Council website, we find the following statement:

The Bitcoin Mining Council believes that using Bitcoin energy is an advantage, not a bug, as this energy provides tremendous security for the network

Bitcoin miners who join the board are not obligated to disclose their energy sources if they do not want to, as there is a voluntary disclosure form that miners can choose to submit in hopes of enhancing transparency.

In the United States, President Biden issued an Executive Order on Climate-Related Financial Risks, which sets out how the government will aim to better define the financial risks that climate change poses to the economy.

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As part of this executive order, there is guidance from the Financial Stability Oversight Board, which includes the Securities and Exchange Commission, to create better ways for companies to provide disclosures about their impact on the climate, just as they provide routine financial disclosures.

Of course, this executive order only affects US companies, and the US makes up only 7% of the world’s total Bitcoin mining industry.

China – not known for its financial transparency – remains the world’s Bitcoin mining superpower, controlling nearly two-thirds (65%) of the entire industry.

However, a growing number of Chinese provinces are imposing bans on bitcoin mining amid environmental concerns for the industry, so this may change in the future.

In any case, there is currently no transparent, central or international body that governs the environmental impact of Bitcoin mining, and therefore, there is no single source that collects information on how much renewable energy each Bitcoin mining operation depends on.

Special studies in this regard:

For now, those interested have to rely on special studies such as the September 2020 report by the Cambridge Center for Alternative Finance, to get the ratios and figures close.

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The Cambridge study found that renewable energy sources support 39% of cryptocurrency mining.

As with most things in crypto, this number is highly contested.

When we look at the CoinShares report, we find that 77% of Bitcoin mining is based on renewable energy.

It is also worth noting that when a coal mine in China flooded and was forced to shut down earlier this year, the bitcoin hash rate (a number used to measure the network’s processing power) fell to levels not seen since November 2020, indicating that the bitcoin network is still dependent on fossil fuels.

If bitcoin mining reaches the point where it has been produced using 50% renewable energy, it is not clear whether a “reasonable” confirmation of this fact can be achieved.

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