The crypto industry wants to be green – that’s easier said than done

Boden, Sweden. In snowy Swedish Lapland is a modern gold mine. But instead of picks and shovels, it is filled with thousands of computers.

These machines, known as mining installations, work around the clock to find new units of cryptocurrency – in this case Ethereum, the second largest token in the world.

To do this, they have to compete with other people around the world to find the answer to a complex mathematical puzzle that becomes more complex as more and more computers known as “miners” join the network. The goal is to secure the system and prevent fraud.

This aetherium mining facility is operated by Hive Blockchain, a firm that focuses on using clean energy to extract cryptocurrencies.

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The whole process is backed up by something known as “proof of work”. And it takes an incredibly large amount of energy. Bitcoin, the world’s largest digital currency, also uses this structure. It now consumes as much energy as entire countries.

Governments around the world are growing concerned. Some countries, such as China, have gone so far as to completely ban crypto mining.

Switching to renewable energy

In the mine in question, in a warehouse-like building in the military town of Boden, there are a total of 15,000 such mining installations. At 86,000 square feet it is more than a standard football field.

The facility is run by Canadian firm Hive Blockchain, which focuses on using green and renewable energy to extract the crypt.

The Swedish mine Hive with an area of ​​86,000 square feet exceeds the standard football field.

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Swedish Operation Hive is powered by a local hydroelectric plant in Boden, in the north. The region is known for its surplus of cheap, renewable electricity.

“In northern Sweden, 100% of electricity is based on hydropower or wind,” said Johan Eriksson, Hive adviser. “It’s 100% renewable.”

Erickson says crypto miners use excess energy capacity that would otherwise be wasted – in other words, it is not required by households in the region.

But the sheer amount of energy needed to conduct operations like Hive’s has alarmed officials.

These machines, known as mining rigs, work around the clock to find new cryptocurrency units.

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Finansinspektionen, the Swedish financial service, calls on the European Union to ban crypto mining due to its huge energy consumption.

“Crypto asset producers are seeking to use more renewable energy sources, and they are increasing their presence in the Northern Region,” the agency said in a statement last year.

“Sweden needs renewable energy targeting crypto-asset producers to change the climate of our core services, and increased use of Miner threatens our ability to comply with the Paris Agreement.”

Is decarbonisation enough?

Edinburgh’s crypto-firm Zumo is part of Crypto Climate Accord, a coalition of companies looking to achieve zero emissions in the crypto industry by 2030.

Kirstin Harrison, Zumo’s climate policy adviser, says the initiative is working on software that will be able to test the energy source used in crypto mining as renewable.

“There are quite a few trials going on this issue now,” she said. “If it’s successful, then hopefully it will filter out the rest of the sector as well.”

According to some activists, a simple decarbonization of cryptocurrency production may not be enough.

Greenpeace and other environmental groups are urging the bitcoin community to replace their mechanism of proof of work with a mechanism called “proof of fate.” This would take away the huge computational cost of verifying new crypto transactions.

Ethereum is currently in the middle of a long transition to proof of proportion, which proponents say will reduce energy consumption by more than 99%. And other cryptocurrencies, such as cardano and solan, are already operating on the basis of share-proof networks.

But, as Harrison explains, moving a cryptocurrency like bitcoin from proof of operation is easier than doing.

“I don’t believe it’s possible to give up proof of work precisely because no player can control the system,” she says.

Not everyone on board

Although Hive and other crypto-firms are increasingly turning to green energy to fuel their operations, there are many others who have not yet realized the transition to renewable energy.

Some intentionally use gas that would otherwise be burned, for example, to generate electricity for crypto mining.

Because China has banned cryptocurrency mining, bitcoin proponents hoped it would make cryptocurrency more environmentally friendly.

But a peer-reviewed study published in February found that bitcoin mining only became dirtier in 2021, and miners are actually flocking to regions that are more dependent on coal and other fossil fuels, including Kazakhstan and the southern U.S. states such as Texas and Kentucky.

Part of the problem is the decentralized nature of cryptocurrencies such as bitcoin. Although there are currently various groups claiming to represent the industry, bitcoin does not have a central authority and anyone can participate in the network.

The crypto industry wants to be green – that’s easier said than done

Source link The crypto industry wants to be green – that’s easier said than done

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