New scientific studies found out that Bitcoin mining could be the next solution for sustainability, but how could that be if crypto mining is such a big polluter itself. So in what way would crypto fit into the sustainable puzzle? And what would that mean to us as common users and how would this affect us?
Why does Bitcoin mining use so much energy
In order for the bitcoin to verify transactions, Bitcoin requires computers to solve ever more complex math problems. And this proof of work consensus mechanism is drastically more energy-intensive than many people realise.Furthermore, as the mathematical questions get harder and harder over time as there is more people fighting to solve them, that would require even more power to solve it. Researchers at the University of Cambridge have found that the electricity consumption of the bitcoin network is roughly equivalent to that of countries like Sweden, Norway, and Pakistan. But while bitcoin has long been labelled as the digital currency climate villain, one novel strategy being looked at is using crypto mining as a form of energy storage by converting stranded renewable energy into bitcoin.
How does renewable energy fit into cryptocurrency mining
While solar and wind energy are often named as the ambassador of renewable energy, the problem is that these energy sources often fluctuate throughout the day and year. While this issue could be solved through the use of lithium-ion batteries, but lithium-ion battery still doesn’t possess the advancement and power to be a long term efficient power source.
This is where the hero of the story, bitcoin comes in by serving itself as a virtual energy carrier. By establishing itself as the main currency used to purchase green hydrogen or the deployment of more green energy farms, it would successfully put itself in the middle of the green energy movement. Furthermore, bitcoin mines could be located near renewable projects, utilising on surplus electricity that would be otherwise wasted, thus turning waste into greater economic gains.
Would there be drawbacks to these solution
However, the research findings are built on many hypothetical premises. In reality, opening and operating a bitcoin mine would be a very costly affair. Bitcoin mines that run around the clock would require hefty starting and operating costs, which would be further exasperated if they wanted to support clean energy.
There is also an economic variable involved in this solution. Because of how crypto mining operations are heavily dependent on the fluctuating value of cryptocurrencies. Imagine if the market crashes, what would that mean for the regions that heavily depend on the mining infrastructure?
Commentators has also pointed out that called crypto mines “energy carriers” is also problematic. Unlike a battery that both uses and produces energy, crypto mines only uses energy but it fails to deliver on the part of producing energy. Maybe the biggest leeway we can give is to call them an energy enabler instead, which is what they are doing here.
A glimpse into the future?
While this novel idea and I strongly believe that these findings has only scratched the surface of crypto mining could do to revolutionise the sustainable landscape. Having said that, we are still at a nascent stage of development and there are still so many things that we need to iron out.
When it comes to economic considerations: how do we maintain the stability of energy despite the fluctuation of crypto market; regulatory considerations: how would the government impose restriction or taxes on mining activity, what kind of legal and regulatory framework would be required for the building of these mining operations; and most importantly infrastructural system: the setting up of power line, cooling systems and internet connectivity to run these mines. All these questions need to be thoroughly thought through before we can start on anything. But I guess that is another problem for another day.
Cheng Yuan
Beincrypto
Bitcoinist
Coindesk
Cointelegraph