Should we be optimist about cryptocurrencies mining energy consumption?
Last week, Le Temps, a Swiss newspaper, showed that Bitcoin mining doubles Switzerland energy consumption per year with intense reactions in social networks.
The mining energy usage rapidly surpassing the totals of small countries and many see this ever-increasing carbon footprint as a threat to climate change.
However, I am very optimist about the future of the cryptocurrencies mining energy consumption.
El Salvador is using volcano power to mine bitcoin
President Nayib Bukele – who has banked his political future on a nationwide bitcoin experiment –posted a video gone viral with more than 2.3 million views, which includes shots of government technicians installing and plugging in ASIC miners, as well as an energy factory in a forest, bordering a volcano.
He instructed LaGeo SA de CV, a government company, to “put up a plan to offer facilities for #Bitcoin mining with very cheap, 100% clean, 100% renewable, 0 emissions energy from our volcanos.”
Heat alternative use
Heat generated by mining operations can be recycled or reused, providing a sustainable, clean source of energy. So, data centers may heat homes, greenhouses or replace heat sources for certain industries.
Genesis Digital Assets is providing a 600 kW air-cooled data center container, that feeds heat to a 300-square-meter greenhouse. The heat would keep the greenhouse at a comfortable 25°C year-round, in a region where temperatures can fall as low as -30°C.
This project looks to focus on growing fruits and vegetables, but data center heat can be used for fish, insect and algae farming or fruit and vegetable drying.
Government Role
If the price of the cryptocurrencies was zero, miners would not be able to cover their electricity costs.
The higher the cryptocurrency price, the more profitable mining becomes, the bigger the incentive to add more energy-hungry machines to the network.
In June 2021 China started enforcing a complete ban on all Bitcoin mining activities in the country after leading worldwide mining.
China policy may be perceived as extreme but it is clear that policymakers should consider measures that may make specific assets less appealing, or stimulate individuals to invest into environmental clean protocols.
UHNWI interest on sustainability
In Asia, a study conducted by Lombard Odier in 2020 found that 61% of UHNW respondents said that they take sustainability into account when making investment decisions. 89% of respondents said that the sustainability trend is no longer a trend and is here to stay.
The next generation of investors stated that sustainability was a key interest for them. A number of them expressed that sustainability is a deciding factor in their choice of relationships with financial institutions.
UHNWI are looking for Initiatives such as Singapore’s new carbon exchange and marketplace, Climate Impact X, that together with Bitcoin mining cleaner energies will lead to a more transparent, greener world.
Seeing the Big Picture
As stated by the United Nations, despite issues of greenhouse gases produced in Bitcoin mining, cryptocurrencies could play an important role in sustainable development.
Bitcoin’s increasing energy consumption has triggered a passionate debate about the sustainability of the digital currency. Nonetheless, there are strategies that if implemented correctly may help to mitigate cryptocurrencies growing e-waste problem.
