Energy-intensive cryptocurrency mining slows the march towards 100% renewable energy – Pv Magazine Australia

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

It is estimated that Bitcoin burned about 76 billion kWh last year, about three times 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 very physical activity, not the ethereal, cloud-like process, which appears to be on the surface. Powerful servers, or mining rigs, have to show ‘proof of work’ and perform increasingly complex mathematical equations during the minting of a single coin. This takes a lot of energy and in turn emits a lot of carbon.

Fortune Magazine said Bitcoin deployed an incredible 707 kWh and emitted half a ton of CO2 per transaction. That’s hundreds of thousands of times the energy required for a credit card transaction. While cryptocurrency is hailed for increasing financial security through decentralization, is the juice worth it?

Forex estimates that bitcoin emits the embodied carbon equivalent of 284 million trees each 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 powered by a higher mix of renewable energy than any major country or industry.” He is appreciated that about 50% of bitcoin mining is powered by renewable energy, but the lack of quality data and transparency raises this figure.

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

Renewables represent about 28% of the global energy mix, indicating that there is still a long way to go to achieve carbon neutrality. By greatly increasing the demand for electricity, crypto mining could displace renewable energy development that could power other important functional aspects of the economy, such as agriculture and transportation.

Climate can challenge crypto value

The cryptocurrency’s carbon impact could affect its valuation in the future, according to the European Central Bank. 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 law banning certain cryptocurrency-based mining activities for two years.

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

Solar Mining Package

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

Mecobit’s new “mining installation” on solar energy.

Image: Mecobit

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

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

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

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