Energy-Intensive Cryptocurrency Mining Slows The March Towards 100% Renewable Energy

Bitcoin, Ethereum and many other cryptocurrencies have been in the spotlight for disrupting financial markets. But an unintended consequence has been the disruption of the global energy market.

It is estimated that Bitcoin burned around 76 billion kWh last year, about triple that of Ethereum. There are thousands of coin types and new ones appear every day.

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The process of generating a single coin is called mining, which may be an apt name for the practice, as it is a highly physical activity, not the ethereal, cloud-like process, that it may seem to be on the surface. High-powered servers, or mining rigs, must show “proof of work,” performing increasingly complex mathematical equations in the process of minting a single coin. This requires a lot of energy and, in turn, expels a lot of carbon.

Fortune magazine said that Bitcoin was deploying an incredible 707 kWh and emitting half a ton of carbon per transaction. That’s hundreds of thousands of times the energy required by a credit card transaction. While cryptocurrency is hailed for increasing financial security through decentralization, is the juice worth it?

lick fire on the umatilla national forest burning at night
Forex estimates that bitcoin emits the embodied carbon equivalent of 284 million trees each year.

Image: Wikimedia Commons

In response to these criticisms, organizations like the Crypto Climate Accord and the Bitcoin Mining Council (BMC) were formed to “promote transparency, share best practices, and educate the public about the benefits of bitcoin and bitcoin mining.”

BMC said: “Bitcoin mining uses a negligible amount of energy, quickly becomes more efficient, and is powered by a higher mix of sustainable energy than any major country or industry.” He is valued that around 50% of bitcoin mining is powered by renewable energy, but the lack of quality data and transparency calls this figure into question.

The University of Cambridge’s Bitcoin Electricity Consumption Index shows that in less than ten years, Bitcoin’s energy demand has grown from next to nothing to around 200 TWh per year, more than the Netherlands and Europe. Austria, and almost as much as Spain, which uses around 250 TWh each year. . Its consumption is several times higher than that of the Three Gorges Dam, the largest power plant in the world in terms of capacity.

bitcoin map

Renewables represent around 28% of the global energy mix, indicating that there is still a long way to go to achieve carbon neutrality. By sharply increasing the demand for electricity, crypto mining can crowd out the development of renewable energy that could power other important functional aspects of the economy like agriculture and transportation.

Climate May Challenge Crypto Value

The carbon impact of the cryptocurrency could impact its valuation going forward, the European Central Bank has said. Last year, China banned all crypto transactions amid financial stability, consumer protection, financial crime, and environmental concerns. The European Parliament plans to submit a legislative report on the climate impact of cryptocurrency by 2025, and New York State has passed a bill banning certain crypto-based mining operations for two years. of carbon.

Investing in cryptocurrencies can present risks for companies that have set environmental, social and governance objectives. Around the world, a large group of banks representing 40% of global banking assets have voluntarily pledged to achieve net zero emissions in their lending and investment portfolios by 2050. Transparency is hard to achieve with mining of cryptocurrency, which means that these banks and companies may not want to take on the investment risk if it means compromising carbon emissions targets.

Solar mining kit

Distributed and decentralized power may be the best solution to mitigate the environmental damage of cryptocurrency if it is to continue on this path. Solar and energy storage built in a distributed manner can reduce the need for transmission infrastructure, reducing the overall supply of raw materials supporting currency mining. It would also ensure that a given mining operation is powered by 100% renewable energy, rather than the estimated 50% or so that powers it today.

Mecobit’s new solar-powered “mining rig”.

Image: Mecobit

One company working in this space is MECO Limited, which recently launched a solar panel kit with a portable power station, to pair with its mining equipment. The new products are called Mecobit M4000 Solar Unit and Solar Panel Kit.

The M4000 portable solar unit includes a lithium-ion battery bank and eight solar panels with a combined power rating of 3 kW. The solar panel kit is a 2kW model that incorporates panels above a rack, with battery storage and the crypto miners mounted below.

Both kits are compatible with most appliances, equipment, tools, household and industrial electronics such as cryptocurrency miners, providing backup and long-lasting power for home and office use. While cryptocurrency mining could represent a fate for the energy generated by the system, it could also be used for essentials like refrigeration, heating and cooling, medical devices, lighting, etc. .

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Energy-Intensive Cryptocurrency Mining Slows The March Towards 100% Renewable Energy

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