Sustainable Energy and Crypto: Is There a Shared Future?
The progress of renewable energy could gain a considerable boost from cryptocurrency miners’ efforts. But how can we curb excessive power usage in mining while enhancing its sustainability? First, we need to understand the term “sustainable”, which has broader implications especially when related to manufacturing, economics, and finance.
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Specialists depict the idea of sustainability as “the three P's challenge”:
- Profit. Every business gravitates towards lucrative opportunities. The more stable the profit, the more resilient the business becomes.
- People. People are an integral element of this trilemma. Cryptocurrencies are designed by and for people, who need more energy-efficient mining methods and a reduced carbon footprint.
- Planet. We're tackling our global challenge of rising temperatures by catering to individual needs.
Solving just one or two issues won't yield any results – the trilemma can only be resolved through a comprehensive approach. The intertwining of these three components is what forms a resilient business.
It's not enough to simply establish a factory – it will inevitably lead to an increase in CO2 emissions. It's also impossible to separately create a community of content people. They require businesses, manufacturing, and unrestricted access to financial services (such as cryptocurrency payments) and capital flow (which is ensured by cryptocurrency mining). Few people would consider a planet to be comfortable when faced with environmental issues and a population lacking financial resources.
While we are currently discussing mining, the concept of sustainability in any sector will always consist of the same “three Ps”.
Where can we find energy?
Electricity has a unique characteristic that distinguishes it from other types of fuel. Every standard fossil fuel (coal, gas, oil) can only be used in a certain way, generally by combustion for water heating. The high temperature of the steam then produces electricity. But there's a hitch – burning fuel invariably involves the simultaneous release of greenhouse gases and harmful emissions into the atmosphere.
Fortunately, there are now plenty of options for affordable and eco-friendly energy. The industry of renewable, clean energy sources is continuously advancing: solar power stations, wind farms, and even traditional hydroelectric power. These are all the best options for cryptocurrency mining. There are also hydrogen power plants (emitting steam) or biomethane facilities with a neutral carbon balance for the environment. In summary, the renewable energy sector now encompasses dozens of different technologies.
The ideal consumer
Fascinatingly, a cryptocurrency miner is inherently an optimal consumer and a universal purchaser of electricity. Contrary to most industries, mining isn't anchored to a particular location. It has no requirement for mineral resources, manufacturing facilities, factories, or infrastructure at large. The absolute necessities are the generation and capability to transmit electricity, and ideally, a mechanism to store energy to create a backup supply. Essentially, you can mine wherever an electrical supply exists.
Thus, miners adapt to the regulatory environments of various countries and have the flexibility to change their cryptocurrency creation locations with ease. They're largely indifferent to their work location – whether that's in the heart of the Brazilian jungle or amidst the industrial hubs of Texas. Another vital requirement is the affordability of electricity per kilowatt-hour.
Given that solar power is one of the most advanced forms of energy globally (next to hydropower), mining is likely to lean towards the planet's southern regions, renowned for their abundance of sunny days. Nevertheless, inexpensive electricity can also be sourced in the north using wind farms or even tidal power stations.
A novel approach in tackling global warming
According to the most recent IPCC report, we need to pivot globally to zero carbon emissions by 2030. The paramount objective is halting global warming at a maximum of 1.5°C. The lingering question is, how can we pull it off? The World Economic Forum's experts offer an intriguing solution: intensifying the adoption of cryptocurrencies and making a beeline for Houston. This city isn't just dominated by oil refining behemoths, it's also the home of Lancium, a company on a mission to fast-track the modernization of the energy sector, from the software right through to infrastructure. Their goal? Eradicating the carbon footprint. The company has raised a hefty $150 million to construct Bitcoin mines, all of which will run on renewable energy. A vast network of these mines will be scattered across the entirety of Texas.
Another noteworthy case is the HIVE blockchain data processing center in Boden, Sweden. It's powered by cheap energy sourced from hydroelectric stations and stands as one of the largest reserves of energy, contributing to the stability of the Swedish power grid. In times of emergency, miners can shut down their ASICs and redirect energy for industrial and societal needs.
An example of an energy-efficient mining cluster
Interestingly, the two companies mentioned above have become consistent income generators. The secret lies in the way energy consumption by people and industries behaves like a sine wave. At peak times, energy use skyrockets, typically in the evenings or during significant temperature swings. On scorching days, people crank up their air conditioning; on freezing days, they turn up their heaters. Simultaneously, electricity demand in public places like shopping centers or subway stations will surge at particular times while it plummets in residential areas. This seesaw pattern of peaks and troughs can be ironed out by miners, ensuring a steady stream of electricity payments.
Such situations demonstrate how the system can operate in a balanced, hence sustainable, manner. Incidentally, the more adaptable the electricity demand, the larger a share renewables can provide in energy production. Picture a mining cluster featuring a solar station, a thermal power station, and a hydroelectric facility, with the thermal power station also potentially operating on renewable energy. During the day, the solar generation takes the brunt of the load. As dusk approaches, the load shifts to the dependable thermal generation or, if there's ample water, to hydroelectric power. During peak load times, different types of generation kick in all at once.
In this light, the primary argument against cryptocurrency mining — its high consumption of non-renewable energy — proves to be a red herring. The cost of clean electricity is critical for miners. The cheaper it is, the greater the potential for expanding renewables and investing in eco-friendly cryptocurrency mining. It's quite possible that in the not-too-distant future, miners will spearhead climate initiatives and pump funds into developing renewable energy sources, which were previously deemed unprofitable.
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