Bitcoin Mining, Renewable Energy and Proof of Work’s Achilles Heel Solution
Can Renewable Energies Solve Bitcoin’s Energy Problems?
Bitcoin, the most valuable and known virtual currency, has been expanding everywhere. In order for it to be secure and operate, there are miners that confirm that all the transactions are processed properly. However, the Proof-of-Work consensus system requires a lot of energy to run.
Bitcoin mining activities consume more electricity than several countries around the world such as Austria, Uruguay or Iceland. This situation has led Bitcoin miners to search new ways to operate without spending so much in electricity. Crypto mining hardware needs to be cool to be efficient and work in a correct way.
This is why several miners moved to other countries or regions with lower temperatures, stable economy and political situation and low electricity prices. Some of these countries chosen by miners are Canada, China and Iceland.
At the moment, 80% of the mining activity in Bitcoin is located in China. This is very important to know because it raises some questions about Bitcoin and its decentralized nature. Can we say that Bitcoin is decentralized if 80% of the mining activities are focused on China?
There is a company that works with renewable energies in Austria that aims to solve the energy problem presented by Bitcoin. Hydroelectric sources of energy are renewable since it only depends on the water flowing from rivers and dams.
The Austrian startup HydroMiner GmbH is working mining virtual currencies using two Austrian hydro-power mills that were not used. The cooling system is also enhanced with air conditioning provided by the cold Alpine currents that are in the region.
About it, Nadine Damblon, co-founder and CEO of Hydrominer, commented:
“We mine only with renewable energy. There will be more blockchain adoption if the energy problem can be handled this way. We’re using renewables not only to be environmentally friendly but also profitable.”
Renewable energies could be very important to improve cryptocurrency mining activities that require a lot of energy. This is also going to reduce the impact that Bitcoin mining activities have on the environment. Moreover, it is possible to improve old hydro plants to decentralize as well mining operations.
There are different countries that have renewable energy resources that are not being fully used. Additionally, companies could start saving important sums of money if they use all their capacity to produce energy and store the unsold energy in Bitcoin, which can be sold in the market.