Recent events have seriously shaken trust in the #cryptocurrency industry –Bitcoin has been largely impacted. The value of one Bitcoin skyrocketed in 2017, with the interest of mainstream investors turning to the cryptocurrency. It managed to break the $17,000 point (starting 2017 at just $1,000). However, there are now serious doubts that the transaction systems and the blockchain trading operations are really secure – as they are marketed to be. There have been some high profile thefts recently – and some of them caused millions of dollars in losses.
In addition, many people are wondering if blockchain transaction processing is as efficient as it is made out to be. Is it really so inexpensive to process transactions with cryptocurrency? Does it mean that processing high volumes of transactions takes a lot less time? Well, maybe not; and the fact that the cryptocurrency industry is such a huge consumer of electricity does not make it any better. If you think about it, solar energy is gaining popularity all over the world. More and more households are powered entirely by solar energy. However, the cost in energy of mining each Bitcoin is increasing by the day.
According to the Bitcoin Energy Consumption Index, at the moment, the electricity used to process a single Bitcoin could be used to power 15 regular United States homes. The price of Bitcoin has seen a dramatic increase, while the price of solar energy is slowly decreasing. As of August 2017, it cost roughly $42 just to transfer one Bitcoin to somebody else. Bitcoin transaction fees are fluctuating wildly due to several factors, so $42 was not considered much (even though it could power an entire US home with solar energy for a substantial amount of time).
The Problem With Cryptocurrency’s Energy Consumption
Reports suggest that cryptocurrency mining requires more electricity than what Argentina consumes daily (note: this country is not a big fan of solar power). And this energy is not coming from renewable sources like solar. In large part, it comes from burning fossil fuels for electricity. According to Morgan Stanley, mining Bitcoin will require more electricity (including from solar sources) in 2018 than all the electric vehicles present on our streets. Another alarming fact is that Bitcoin processing consumes more energy per day than 159 countries on this Earth. Since very little of this electricity is coming from solar installations, the amount of CO2 released due to the excessive energy needs of cryptocurrency mining is astonishing.
The problem of electricity and solar power doesn’t seem to matter in any way. Recently, Kodak has announced that it is developing a cryptocurrency of its own. Kodak shares soared almost immediately following the announcement, even though the company didn’t even mention solar power. It doesn’t seem to matter that the solar industry is unable to keep up with the increase in power consumption.
More and more companies are starting to process, mine or simply use Bitcoin and other cryptocurrencies. However, very few of them are thinking about the fact that the energy needed to work with this kind of currency is not coming from renewable sources like solar. CleanSpark is one company that cares and that wants to use solar power and other renewable sources to power a cryptocurrency mining operation.
The company designed a microgrid that is able to power an entire Bitcoin mining operation. It is based on a large solar installation capable of providing the solar energy the operation needs. In addition to solar energy production capabilities, the installation uses a lead-acid battery for energy storage. The battery will send the solar electricity to a load bus that is driven by direct current (DC). The load bus is able to supply both DC and AC solar electricity so that the mining operation and all adjacent services get the most out of the solar installation. Also, the battery and the load bus are designed to help the solar installation reach its maximum potential and produce as much solar energy as possible.
CleanSpark’s project is just a proof of concept at this point, but it works – according to a press release from the company. It looks like solar energy is really capable of powering an entire cryptocurrency mining operation. According to Solar Magazine, when it is complete, the solar-powered microgrid will be able to support a continuous load of 85 kW per module. In other words, it is like a 600 kW solar storage system.
An interesting fact is that the customer who works with CleanSpark to get the solar energy for his or her cryptocurrency mining operation is aware the Bitcoin may not be a sustainable business strategy. This is why the client is working with CleanSpark to ensure they can make a profit from selling the solar energy to utilities companies in case Bitcoin mining proves to be unprofitable. Also, there is talk of providing auxiliary grid services like frequency regulation or voltage regulation through the solar installation.
CleanSpark estimates that the final price of the kilowatt-hour (kWh) of solar electricity will be around $0.11. This is a very good price considering the price of electricity in California and the rest of the US. In the future, the solar installation may see an upgrade from lead-acid batteries to lithium-ion batteries and other, innovative battery storage systems. As solar energy is becoming cheaper, and storage technologies are becoming more efficient, more and more cryptocurrency mining companies and enterprises are considering satisfying their energy needs with solar energy (at least in large part). Using solar power is cheaper. And electricity coming from solar sources is green. Keep up with solar news to stay in the loop!