Renewable Energy Solutions Could Help Cryptocurrencies In The Long-Term

Regardless, one problem remains. Mining, the process of creating new crypto coins, is well-known for its high energy consumption. In the context of an increasing push for sustainability, activists have claimed that the cryptocurrency market hasn’t done enough to mitigate the adverse effects of mining on the environment, including greenhouse gas emissions and resource depletion. Renewable energy sources could be an answer to the problem. However, many are skeptical about how well they would work.

An Overview

Crypto’s energy consumption is no secret. According to research, mining activities can sometimes consume more energy than some countries, including Norway, Sweden, the Netherlands or Spain. China, a major producer, banned crypto mining in May 2021, so processing moved to countries such as Kazakhstan and the United States. However, climate scientists have outlined that neither gets most of their power from sustainable energy sources.

In the case of the US, a large part of production moved to Texas, challenging the state’s already troubled electric grid. When a violent snowstorm hit the state, causing a blackout that resulted in several fatalities, many blamed crypto mining for the system failures, while miners themselves argued that they were scapegoated and that bigger energy consumers managed to get away unscathed. In the case of Kazakhstan, critics have also argued that cryptocurrency creation has made the electricity grid more vulnerable by pushing it far beyond its standard capacity. Moreover, the intensive use of coal is also detrimental, polluting the country and contributing to faster depletion of fossil fuels.

The Goals

Currently, crypto’s global power is an estimated 0.20% of the worldwide energy consumption. According to a 2022 report, Bitcoin mining releases over 65 megatons of CO2 each year. BTC’s Mining Council, on the other hand, argues in a study released in the same year that nearly 60% of the energy is derived from renewable, eco-friendly sources, a sign of clear progress. According to research, this means an increase in efficiency of nearly 50% due to better semiconductor tech and mining developments.

The overall profitability of crypto is determined by both the electricity costs and the difficulty of solving a block. Even when the price of a coin drops, mining remains a successful activity that yields significant amounts of revenue. Miners must also consider the additional costs associated with cooling and the discharge limit associated with Lithium-ion batteries, which generally allow continuous discharge of 10C. As the market changes and cryptocurrencies stop being a niche asset class that only a few people use, many believe that alternative energy sources that don’t rely on coal, gas, or oil should be used more frequently.

There are different options that the cryptocurrency environment could use, but users will want to see the effects of this green energy revolution on the mining process.

Green Energy

Solar energy is arguably the most affordable sustainable source out there. It is also the energy source with the highest growth rate, as nearly 5% of the current worldwide supply comes from solar power. The most significant advantage is that this type of energy has global potential compared to other resources that can be scarcer depending on geographical area. Using solar energy has become more common among miners as of late. Even during the ongoing bear market, a company in western Colorado started mining at a six-megawatt plant.

Texas, currently one of the most important parts of the world for crypto mining, has been using both solar and wind energy. Wind turbines are highly resistant devices and can survive adverse conditions better than solar panels. They also generally need less maintenance work overall. However, the location must be chosen much more carefully, as wind speed and density differ depending on the area. One of the latest tech developments in this area is the bladeless turbines. Yet, it is currently unknown how popular they will become or if they’ll ever be considered competition for the classic models.

Hydropower is another possibility. With an extraction efficiency exceeding 90% sometimes, and one of the lowest carbon footprints of all sources, water is one of the best eco-friendly energy sources. Italian startups involved in crypto mining have already started using it in their processes. Currently, hydropower accounts for nearly 20% of the worldwide energy output. Nonetheless, there are also several disadvantages associated with using this type of energy. Some of the biggest problems involve changes in land use, as well as the natural habitats and homes located close to the dams.

The Effects

While the long-term effects of switching to greener sources are not yet fully understood, it’s not far-fetched to stipulate that mining profitability will be improved by resorting to clean energy. As such, what’s good for the environment is also suitable for the cryptocurrency market. One thing’s for sure; green mining would undoubtedly clean up Bitcoin’s carbon footprint. This could even incentivise consumers concerned about environmental pollution to take up trading.

When miners are convinced that green energy isn’t detrimental to crypto production, they’re more likely to adopt it in larger numbers. Much like the shift from a proof of work protocol to proof of stake reduces the energy by a factor of nearly 10,000, or 99.95%, green energy is the following step in making cryptocurrencies more sustainable.

Some have even discussed the possibility of using excess green energy stored in batteries. In areas with higher production, than there is demand, this could be a clever way to ensure that no power goes to waste.

The cryptocurrency market is constantly growing and developing. Among the changes, the one most are waiting for is related to its long-term sustainability.