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How Can Cryptocurrencies Reduce Their Environmental Impacts?

The fact that the cryptocurrency market capitalization is worth close to $400 billion speaks volumes. In fact, the whole market has come a long way since Bitcoin was first introduced in 2009. Today, there are nearly 2000 alternative cryptocurrencies that you can select from. On top of that, you can also trade these cryptocurrencies on exchanges that are available in every country. It is clear that the cryptocurrency trend is ongoing in the market.

Despite this, one obvious hurdle that the cryptocurrency market has to overcome is the high energy which is needed to create these cryptocurrencies. The high level of electricity required can be attributed to the cost of cryptocurrency mining. However, there seems to be light at the end of the tunnel. In this article, we will detail several projects which have been carried out by cryptocurrency miners to make their operations greener. Before that, let’s understand the cryptocurrency mining process.

Bitcoin mining

Essentially, Bitcoin mining is a process in which people with high computing power can create and mine new Bitcoins. The reason why people are engaging in this practice is that it can be financially lucrative for them to do so. Also, Bitcoin miners have the responsibility to verify the transactions done on the blockchain. It is also one of the reasons why people cannot easily hack the blockchain. With a high computing power required to solve the algorithm on the system, having to rewrite the blockchain code will be too much work. As there are no centralized authorities to look over the transactions and blockchain, these miners are the people who are responsible for maintaining transactions on the infrastructure.

Engaging in cryptocurrency mining is also not cheap. In fact, the hardware and graphics card is increasing in prices that only larger corporations can engage in cryptocurrency mining. In comparison, VISA is a credit card company only uses 2% of the electricity that Bitcoin utilizes. It doesn’t help that the cost of power in certain regions are increasing due to the sudden surge in electricity demand. This is also a deterring factor for new miners to enter into the practice.

What can solve the problem? Let’s take a look at several countries around the world that pose a solution to this environmental problem.

1. Iceland

In this region, there is an abundance of natural geothermal energy which drives down the cost of electricity. This is ideal especially for cryptocurrency miners as they can save up on the cost of their operation. As cryptocurrency mining rigs run round the clock, having access to lower rates of electricity can make a huge difference in their profit margin. Another important factor in Iceland is that it is extremely water-rich because this is a resource naturally found in their ice caps and underground. As a result, this creates an avenue for hydroelectric power which is abundant in the country.

On top of that, the country is also working on development with wind energy. In fact, the country believes that this source of energy has a huge capability of showing success in generating electricity. As miners require a cool climate to ensure that their hardware doesn’t overheat, the region provides a cool climate that will reduce the cost of purchasing expensive air-conditioning for server rooms in mining rigs.

A commercial enterprise which has recently announced a groundbreaking success to the country and the cryptocurrency community is Moonlite. They have announced that they will be producing large-scale and uninterrupted low-cost electricity for its mining operations. After this announcement, the authorities of Iceland has received multiple applications from companies around the world that want to become cryptocurrency companies within the country.

Although so, it is not easy to get into Iceland as the entry requirements for anyone was to set up in mining business within the country is highly stringent. In fact, a lot of cryptocurrency applicants fail to set up their business within the country. It is mainly because the energy capacity within the nation is reaching its maximum capacity and only a select few can enter Iceland to run mining operations.

Moonlite has successfully secured the necessary contracts to commence their business later on this year. The current focus of its operations is on industrial scale cryptocurrency mining. Therefore, they will work towards their goal of becoming the largest cryptocurrency miner in Iceland. The other industry participants that are taking up a lot of electricity includes the data centers which are not mining cryptocurrencies.

It seems that the future looks bright for Moonlite as Iceland has plentiful of natural resources that they can utilize. On top of that, they will reap the rewards of a great profit margin as the electricity bills in Iceland is not even reach 25% of the energy bills in major cryptocurrency countries. Therefore, the mining operations held in the country is geared toward a highly profitable direction. To solidify its business, the company is offering the opportunity for investors to be a part of their business. In fact, they will launch an initial coin offering in which the participants in the crowdfunding mechanism can get a token to invest in their growth. After the initial coin offering, the tokens will be available on exchanges.

On top of that, they are also in the process of hiring an operational team that can oversee their data center operations. Some of the best minds in the business are those that they want to recruit. Therefore, you must have good qualifications to join their team.

2. Canada

In Canada, a greenhouse and fish farm is utilizing the waste heat which is generated through Bitcoin mining to complement its operations. Therefore, this means that there is a possibility that Bitcoin can be more energy-friendly in the future. The Bitcoin mining operation which is merged with the creation of the greenhouse any fish farm is one of the many ways that miners can make their cryptocurrency operation much more sustainable. The company which is based in Canada wants to create a sustainable food system. As the owner of the fish farm also runs the Bitcoin mining system, he directs the waste heat through his operation to his greenhouse and the water in the fish tanks.

The owner of this cryptocurrency mining rate believes that the heat that his operations produce can be used for agricultural purposes. Besides just channeling the waste heat for agricultural purposes, there are already miners who use the heat generated for their apartments. Therefore, it is possible that miners repurpose the use of their waste heat into some other beneficial purposes.

In Manitoba, the cold climate and the abundance of hydroelectric power make it a region that is popular for cryptocurrency mining. As the hype around cryptocurrencies have caused more miners to search for locations that they can set their mining rigs, miners have set up their hardware in Manitoba.

3. China

Bitcoin mining energy comes from small regions within China where electricity is relatively cheap. However, their cheap electricity might meet some stiff competition from Canada which is embracing the concept of Bitcoin. In certain regions of China, miners are utilizing the hydroelectricity power which is cheaper compared to fossil fuel power.

Wrapping things up

It is clear that cryptocurrencies and the practice of cryptocurrency mining will stay for quite some time. As it is busy picking up on the global momentum, corporations and individuals that involved himself in the practice of mining must search for more ways to make their operations greener. Some of the early movers in the industry have moved to colder climates to take advantage of the natural temperature to save on operating costs. Through careful and strategic planning, miners can play their role in helping to reduce the environmental impacts of cryptocurrency mining.

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