World leaders are currently discussing Climate Week at the United Nations General Assembly, and this report aims to suggest some possible alternative solutions that leverage Bitcoin mining in this regard.
According to a recent report by the Crypto Council for Innovation (CCI), green Bitcoin mining could prove useful in the transition process towards renewable energy.
Indeed, Bitcoin can help combat imbalances between energy supply and demand, and in particular those that concern the gap between requests for energy produced from zero-carbon sources and the energy production itself.
Those who produce electricity using renewable sources often fail to optimize production by adapting it to demand and, therefore, do not maximize their profits. Bitcoin mining could help in this regard, allowing excess production to be monetized.
The Bitcoin Mining Report
The ICC report was titled Proof of Work and Enabling the Energy Transition and consists of a 39-page PDF packed with data on the topic.
The Crypto Council for Innovation is a type of association that brings together many cryptocurrency operators, particularly American ones, including, for example, Coinbase, Fidelity Digital Assets, Gemini, OpenSea, Block and others. The report highlights four possible actions to support the fight against pollution.
The first is a strategy that has been talked about for a long time. It involves using waste gases from hydrocarbon extraction plants to extract Bitcoin. They are gases that are currently simply burned, while they could have a practical use in monetizing BTC mining.
The second is also nothing new, that is, experimenting with new technologies to cool mining farms, given that it is estimated that 40% of the energy consumed by Bitcoin mining is used precisely to cool the machines.
The third has not yet been fully tested, that is, using Bitcoin mining as a support strategy to balance the instability of the electrical distribution network. In particular, they hypothesize using any excess electricity input into the grid, however frequent, to power mining operations in real time with a timing of 5 or 15 seconds.
The fourth is a long-term initiative, consisting of finding new sources of renewable energy that can add 3 GW to the US electrical grid.
The Investment Problem
One of the main problems faced by those who innovate is finding sufficient funds to continue. In particular, the use of renewable energy seems to be effectively hindered by the lack of investment in adequate infrastructure, also due to competition from traditional infrastructure.
The problem of fluctuations in renewable energy production with wind and solar energy due to daily and meteorological variations is especially long-standing. Clean energy produced in remote areas, often ideal for production, often has difficulty reaching consumers.
Bitcoin mining can help address these issues, because it is able to attract investments from the market that simply wouldn’t be there otherwise.
Bitcoin Mining: Solutions
The first concrete solution identified consists of making the load of networks powered by renewable sources more flexible, which can minimize the imbalance between supply and demand.
The second is related to coherence. Renewable energy markets often face periods of low demand that impact market prices and business models. Bitcoin mining can serve as a constant source of demand, reducing falling electricity prices.
The third is transparency, as Bitcoin and cryptocurrencies provide a new paradigm that allows large amounts of public data to be used in real time to inform decision-making and therefore generate greater awareness and accountability.
By Audy Castaneda