- Future of Fossil Fuels From Thin Air - June 13, 2018
- Steeling the Spotlight Again - April 18, 2018
- Explosion of Esports - March 7, 2018
- Mining digs deeper and deeper into our energy consumption. - February 6, 2018
In the recent months of crypto-currency development, one key aspect has been on the rise: the energy consumption during the mining and transaction process, so much so that there was an energy consumption index made for Bitcoin. The number of miners and their energy usage was on the rise as crypto-currencies moved from obscure payment method to Goldman Sachs creating services around them. This in addition to many others concerns brings up a lot of questions regarding contemporary attitudes to the environment. Infrastructure of block-chain can be used in innovative ways for new approaches to modern problems but can the problem itself offer a solution to rising energy consumption?
The cost of Bitcoin
The problem stems from the way by which miners obtain revenue from their actions: contributing to ledger used for all the transactions, which rewards scalability of operations by profits but with that the electricity bill too. One estimate (Bitcoin Energy Consumption Index) exposes that under a year the estimated electricity consumption quadrupled from 10 TWh to over 40 TWh, surpassing energy consumption of 53 countries, and is equal to 35.4% of Netherland’s usage. Overall that estimate stands at 0.21% of world’s energy consumption. Between the time that this index was heavily disputed for its methodology (and defended), Morgan Stanley released their outlook for this sector with their estimates at least at 23 TWh. Morgan Stanley’s future predictions are based on number of rigs orders with consumption rising to 123 TWh, over five times as much as at the beginning of this year. Due to recent price developments I am willing to make a prediction that number of orders might have dropped, netting a decrease in future energy consumption.
One of the solutions presented to this issue is Envion’s Mobile Mining Unit. Their argument is tapping into the surplus of renewable energy generated by various plants. The biggest problem in recent years with those sources is not the price per kWh, but the reliance on favourable conditions to generate power (unlike non-renewables which have less fluctuating energy production) and storage problems where our batteries’ capacity cannot compensate shortages with stored energy. Envion’s their motivation is furthered by enabling more revenue sources to renewables such as solar plants, allowing for excess production to flow into the Units, mine (multitude of currencies), and for owners of those to benefit from free energy during excess supply periods allowing for more diversified revenue flow while providing investors with high returns. This all they claim will be tied by monitoring service measuring lowest priced regions for deployment, with the unit made to scale easily.
Concluding on Crypto-currency (and more)
Looking at the price movements of Bitcoin at the end of ICO 14th January, and what is happening right now, although raising millions the climate for a company that is just starting its operations is getting notably less accommodating.
For as long as crypto-currency will be used and large-scale energy storage will remain a problem, this is an innovative way to tackle two issues at the same time. Could such idea even combine the two markets into coherent sector to a degree? It is possible, especially as block-chain is entering more and more non-currency regions, yet the demand for miners will remain. One issue that could arise is when Envion’s venture will be successful but the volatility of crypto-currencies remains where it is. The reliance of energy producers on mining operations could cause additional volatility in their sector, and we know how stable crypto-currencies are.