Cryptocurrencies are changing the global financial scene. Blockchain technology decentralizes transactions so that commerce can happen outside of traditional institutions. Bitcoin and other cryptocurrencies have additional advantages such as a low storage cost and low fraud rate.
However, the environmental costs of bitcoin mining have generated controversy. A joint venture between Square, a payment processing company, and Blockstream, a bitcoin mining company, could provide a renewable solution to cryptocurrency energy costs.
Bitcoin mining is a process that verifies blockchain transactions and adds more bitcoins into circulation. There is a possibility that a miner can earn free bitcoin for carrying out this work. However, the currency comes at an environmental cost. Computers perform mining calculations and require extensive processing power. As more computers get involved with this endeavor, power companies must burn more fossil fuels to meet the need.
The true electrical costs of mining are unclear. The environmental cost depends on the location of a miner's power grid. Mining in an area that is fully dependent on fossil fuels releases more carbon than mining on a grid with access to renewable energy sources such as solar and hydroelectric.
However, questions about the environmental impact are starting to drive some consumers and companies away from cryptocurrency. Recently, Elon Musk suggested climate concerns as the reason for refusing to accept bitcoin for Tesla purchases. Musk tweeted, “Cryptocurrency is a good idea on many levels, and we believe it has a promising future, but this cannot come at great cost to the environment.”
As a potential solution to these environmental concerns, Square is investing $5 million to develop a bitcoin mining site that runs on solar energy. Their project partner, Blockstream, will provide the necessary infrastructure and manage the facility. Blockstream will use one of its existing mining sites for the project.
According to a release by Blockstream, they hope to prove that “bitcoin mining in conjunction with renewable energy can help drive the clean energy transition.” To that end, the project includes a publicly available dashboard listing such data as the operational costs and the ROI of the project. A successful experiment will provide a boost to the cryptocurrency industry.
Solar power is changing the way that industry thinks about energy production. By generating power with sunlight, businesses can not only meet their electricity needs, but they can generate income by sending excess power into their local grids. If solar energy can fuel a power-hungry process like blockchain management and verification, it will demonstrate the potential of solar power for other energy-intensive industries. To learn how a solar array can benefit your Southern California home or business, contact Sullivan Solar Power today.