How Alternative Energy Crypto Mining Works
To the average person, the concepts of alternative energy and cryptocurrency don’t have much to do with each other. However, the growing popularity of crypto has exposed shortcomings in the power levels it takes to mine it.
In other words, mining crypto such as Bitcoin or Ethereum uses a vast amount of energy, and climate change advocates are starting to take notice. According to estimates from Cambridge, Bitcoin’s carbon footprint is extensive, and it uses up more electricity than the whole country of Argentina.
According to their research, the power used to mine crypto can power all tea kettles used to boil water in the U.K. for 18 years — it’s clear that mining crypto is not the most eco-friendly hobby.
Here’s more about alternative energy crypto and how prevalent it is in the world of cryptocurrency, as well as some of the benefits.
What Is Alternative Energy Mining?
Essentially, crypto investors use extensive hardware and software to mine cryptocurrency. Sometimes that hardware is up and running day and night, solving complex mathematical problems.
Crypto mining involves validating transactions and maintaining and developing the blockchain ledger while also preventing double-spending. It’s a complex and sophisticated process.
On the other hand, alternative energy crypto mining focuses on using renewable power sources to account for this excessive consumption.
Currently, mining crypto uses significant amounts of fossil fuels for bitcoin mining and verifying transactions. Tesla owner Elon Musk noticed this, and as a result, stopped accepting bitcoin payments for company cars until the industry finds new ways to decarbonize and lessen its environmental impact.
Traditional Mining vs. Alternative Energy Mining
Due to the nature of cryptocurrency, there’s some debate over whether alternative energy crypto mining is necessary. Proponents of traditional mining believe the process still uses less energy than the current global economy. At the same time, critics argue that the craze of bitcoin is causing a depletion of natural resources. Although there’s a clear divide, using less energy to accomplish the same goals rarely comes with any downsides.
There’s some uncertainty regarding the total energy consumption of traditional crypto mining. Disparities in research show that more standard methodologies are needed when conducting studies on this topic.
In addition, it’s challenging to determine how much carbon is being emitted by the cryptocurrency sector. In other words, the total energy consumption does not directly relate to the amount of carbon emitted. Harvard Business Review makes a helpful analogy — one unit of hydroelectric energy has a lower environmental impact than one unit of coal-powered energy.
Suppose crypto miners transitioned to using renewable energy sources for their operations. In that case, greenhouse gas emissions could be reduced, therefore lessening the effects of climate change and creating a more sustainable world. That’s the ultimate goal of alternative energy crypto mining.
Alternative Energy Sources Help Achieve Sustainability
Solar, wind and hydroelectric sources are perfect examples of renewables that can help miners in their endeavors.
In addition, switching over to using lithium-ion batteries could be a feasible alternative. The automotive industry already accounts for 60% of li-ion battery use for its electric vehicles (EVs). More sustainable practices like this must be incorporated into traditional crypto-mining infrastructure.
Some investors believe crypto mining will naturally solve the energy consumption issue on its own. According to the International Energy Agency (IEA), solar is now considered the cheapest power source compared to coal and gas that many countries still rely on. Whether or not this issue will be solved naturally is dependent on many factors.
China’s Role in Lowering Energy Consumption
China is already using fossil fuels and hydroelectric methods of obtaining energy needed to power its mining operations.
Aside from using these viable alternative energy sources, the Chinese government enforced a harsh crackdown on mining after realizing the carbon footprint it was creating. At the time, 65% of crypto mining took place in China, and as a result, the value of Bitcoin dropped dramatically.
When China took mining users offline, fewer people used the machines necessary to mine, which significantly reduced energy consumption. Now, miners are deciding to move to get away from the new crypto rules.
The Emergence of Clean Crypto
Crypto companies are attuned to the ever-changing landscape of the cryptocurrency industry, and some startups are now looking into incentivizing renewable energy.
For example, Compass Mining, a company that crowdsources hash rate, made a 20-year deal with Oklo, a nuclear fission company, to supply them with low-cost, neutral carbon power. The plan to integrate Compass’s mining machines with clean, affordable energy will begin shortly.
Another example of clean crypto making its way into the industry is Candela, a currency that requires solar-powered mining. Candela users can transfer solar energy to other people in their community using a decentralized system and Candela coins as a medium of exchange.
While these are only a couple of examples of the growth of clean crypto coins, we’ll likely see more pop up as cryptocurrency continues to evolve as years go by.
The Future of Alternative Energy Crypto
Bringing industry leaders from both sides together to form innovative solutions is necessary to adequately address the energy consumption problem. Using renewable energy sources to power advanced computers for mining purposes will disrupt the current crypto industry. More opportunities for clean startups will likely arise, helping achieve the overall goal of sustainable energy within the cryptocurrency world.