Bitcoin mining will consume all the world’s electricity by February 2020 if it continues to increase at current rates. (source: powercompare.co.uk/bitcoin)
While there is much speculation over the investment potential of virtual currencies, there is also an increasing awareness of the extreme energy requirement that results from creating one such currency: Bitcoin.
In a world where we are already struggling to keep up with energy demand, how can we possibly cope with this new energy requirement? Is it possible to create and adopt a virtual currency that consumes less energy than physical cash? Where the net energy use of servers versus the energy required for hard metal mining, smelting, minting, transporting and storing is less?
Right now, there are no clear answers. The sheer mass of server energy to support existing levels of Bitcoin mining (via Blockchain technology) are staggering, so it’s not surprising that some projections indicate that there will be no saving, rather a steep increase in electricity needs.
In addition, it’s critical to note that Bitcoin mining (or the process of creation) requires Blockchain technology - the 2 are intricately linked.
At present there is a move within the energy industry to harness Blockchain technology to enhance the security of transactions and the control required by the future Smart Grid. This is coming from a real requirement for enhanced security as the Grid becomes digitalised. However, it needs us to ensure that we are not solving one problem to create another – creating a significant energy consumer (Blockchain server energy requirements) to enable the reduction in another part of the system (enabling more renewables through smarter control.)
And to complicate matters more it’s likely that we will be running both currencies (physical & virtual) side by side for some time - with both their energy demands.
However, the energy use as a result of the process of “mining” for virtual currencies does have possible lower-energy solutions based on changing the process of verifying that the transactional ledger. This is communicated really well in this article https://www.technologyreview.com/s/609480/bitcoin-uses-massive-amounts-of-energybut-theres-a-plan-to-fix-it/
Either way, we need to keep an eye on the energy picture and the combined needs of data security, lower emissions and energy security.
Critically, as traditional centralised electricity generation is no longer the norm, with coal being phased out and signals from whole nations to pull out of nuclear… where will the energy security come from?
There are two sides to every coin…
Time for some answers.
We are moving to a smarter, decentralised energy system – one that is more efficient and requires less non-renewable resources; localised, efficient distribution that connects generation to near-by demand. This means that we should get more output from fewer resources and lower carbon emissions.
So, there may be the potential for a future where the high levels of energy required by technologies that enable higher levels of data security and encryption can be renewable and sustained by the wind / solar resources that our world can harness. However, how we get there is unchartered.
This is exactly the world that Argand is helping to navigate by providing solutions that will enable smarter management of renewable electricity and storage to balance the Grid.
There must be a better way, a far less energy intensive way. And while we all figure this out, we’ll keep working on that smart, agile, clean energy future to supply those efficient needs… You can find more about our work here.