Energy-intensive cryptocurrency mining is slowing the march to 100% renewables – pv magazine Australia | Jewelry Dukan

The power consumption of crypto mining can exceed that of large industrialized nations. Solar power and storage can help reduce carbon emissions, but could the energy be best used elsewhere?

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

Bitcoin has burned an estimated 76 billion kWh over the past year, about three times as much as Ethereum. There are thousands of types of coins and new ones are added every day.

The process of creating a unique coin is called mining, which might be an appropriate name for this practice as it is a very physical activity and not the ethereal, cloud-like process that seems to be on the surface. Powerful servers or mining rigs must provide “proof of work” and perform increasingly complex mathematical equations in the process of minting a unique coin. This requires a lot of energy and in turn emits a lot of carbon.

According to Fortune magazine, Bitcoin uses an incredible 707 kWh and emits half a ton of carbon per transaction. That is 100,000 times the energy required for a credit card transaction. While cryptocurrency is hailed for increasing financial security through decentralization, is the juice worth the squeeze?

Forex estimates that Bitcoin emits the embodied carbon equivalent of 284 million trees every year.

Image: Wikimedia Commons

In response to these criticisms, organizations such as 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, is rapidly becoming more efficient, and is powered by a higher mix of sustainable energy than any major country or industry it is.” estimated that about 50% of Bitcoin mining is powered by renewable energy, but the lack of quality data and transparency calls that number 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 almost zero to around 200 TWh per year, more than the Netherlands and Austria and almost as much as Spain, which does roughly every year 250 TWh consumed. Its consumption is many times higher than that of the Three Gorges Dam, the most powerful power plant in the world.

Renewable energy accounts for about 28% of the global energy mix, suggesting there is still work to be done to achieve carbon neutrality. By soaring electricity demand, crypto mining may crowd out renewable energy development, which could power other vital viable aspects of the economy, such as agriculture and transportation.

The climate may challenge crypto value

The cryptocurrency’s carbon footprint could impact its future valuation, the European Central Bank said. Last year, China banned all crypto transactions due to financial stability, consumer protection, financial crime and environmental concerns. The European Parliament plans to present a legislative report on cryptocurrency’s climate impact by 2025, and New York State passed legislation that would ban certain carbon-based crypto mining operations for two years.

Investing in cryptocurrencies can pose risks for companies that have set environmental, social and governance goals. Globally, a large group of banks, representing 40% of global bank assets, have voluntarily committed to achieving net-zero emissions across their lending and investment portfolios by 2050. Transparency is difficult to achieve with cryptocurrency mining, which means these banks and companies may not be willing to take the investment risk if it means jeopardizing carbon emissions targets.

Solar mining kit

Distributed, decentralized power may be the best solution to mitigate cryptocurrency’s environmental damage if it is to continue down this path. Solar and energy storage built in a distributed fashion can reduce the need for transmission infrastructure and reduce overall resource input to support currency mining. It would also ensure that a given mining operation runs on 100% renewable energy, rather than the roughly estimated 50% that powers it today.

The new solar powered “Mining Rig” from Mecobit.

Image: Mecobit

One company operating in this space is MECO Limited, which recently released a solar panel kit along with a portable power station that can be paired with its mining equipment. The new products are called Mecobit Solar Unit M4000 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 3kW. The solar panel kit is a 2kW model that integrates panels on a rack, with battery storage and the crypto miners mounted underneath.

The two kits are compatible with most household and industrial appliances, equipment, tools, and electronic devices such as cryptocurrency miners, providing backup and constant 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 such as refrigeration, heating and cooling, medical equipment, lighting, and more.

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