This week in crypto. How crypto mining can improve the energy sector, NFT Museum District and more...
How crypto mining can improve the energy sector
Crypto mining industry is working hard to shed the climate-harming reputation it so unjustly got from the people who don’t quite understand neither how it works, nor how it compares to others.
What’s remarkable, however, is that in addition to the “comparison” argument (“why does noone say anything about the gold mining industry that uses x5 energy and also pollutes soils and rivers with toxic chemicals?”) crypto mining proponents increasingly speak about the benefits it can bring to the energy sector, promising to improve power grids and stimulate green energy production, while multiplying carbon-neutral or even carbon-negative use cases.
So how exactly can crypto mining improve the energy sector?
Stimulate green energy investment
Renewable energy does not come cheap. Building a solar plant or a river dam would need many years to become profitable, especially taking into account the intermittent (i.e. unreliable) nature of the energy. That’s why most clean-tech projects are heavily reliable on government subsidies, which come from taxpayers’ pockets and therefore are limited. The technology progresses though, and it is reasonable to hope that production costs will go down progressively… but that too needs investments.
Crypto mining is flexibile, which means that a miner could be turned on and off instantaneously following energy fluctuations. This enables miners to absorb the energy when available and rest when it’s not, making renewable sources more profitable and stimulating investments. Many crypto mining projects have already motivated investors to build green energy plants, with most recently Tesla, Block and Blockstream partnering up to build a solar-powered Bitcoin mining plant in Texas.
Crypto mining is also mobile: miners could be installed virtually everywhere, which once again helps maintain renewable energy projects that are often situated far from the countries’ infrastructure: a Brazilian dam on the Amazon river or a solar plant in West Texas’ no man’s land (Brazil does consider introducing a 0% tax on green mining to attract crypto mining and Texas is already a crypto mining mecca). Being plugged directly onto the energy source, miners can also harvest the energy that would be lost due to the network’s inefficiencies (the amount of energy decreases as it travels).
Crypto mining is now powered by renewable sources at 58%, which makes it one of the world’s greenest industries. This percentage is far from definitive though: the trend is clearly green and we may see the renewable share of crypto mining rise.
Strengthen energy grids
Most renewable energy sources are intermittent. This means that power grids it is connected to are subject to extreme fluctuations from too much electricity to not enough, and this is not good for the grids which require a stable source of power. That is why most of them add a fossil fuel into the mix to keep a continuous base load. Plugging crypto miners helps absorb the excess energy and eliminate problematic power surges.
In deregulated power grids, like the Texan ERCOT, a balance between power supply and demand is very important and having too much power and not enough buyers can be as bad as the opposite. For quite some time already, the state is used to both low energy prices and rolling blackouts in peak energy consumption moments. Last year’s winter storm and a massive blackout that followed were in part caused by this problem.
Unsurprisingly, Texan Senator Ted Cruz is one of the most fervent crypto enthusiasts in the country, who has been advocating for more crypto mining operations in his state: they will create a stable demand for the energy, which will maintain more energy producers in business and solve the blackouts problem. The miners will also be able to turn off the machines at times of peak consumption or in the moments of a power shortage if low temperatures or another natural disaster bring power generation capacity down.
Improve energy efficiency
A miner is a machine, and it heats up when working, just like your PC. This heat can then be used for other purposes, and innovative projects in this sector abound.
In the US many individual crypto miners use their machines to heat their houses, and a Minnesota-based crypto enthusiast is even managing to heat his pool. Devices like Heat Recovery help optimise mining rigs’ heat recuperation.
In Canada Mintgreen miners recycle their heat to warm water for a whiskey distillery and a salt facility; a project to heat residential and commercial buildings in Vancouver is also underway.
In Sweden Genesis miners heat up greenhouses.
In Norway Kryptovault miners use waste heat to dry timber, and soon seaweed.
Repurposing crypto miners’ waste heat is becoming more and more widespread, showing just how efficient and eco-friendly crypto mining could be. And this is just the beginning.
Reduce greenhouse gas emissions
Crypto mining can be not only carbon-neutral, but also carbon-negative, i.e. reducing the quantity of greenhouse gas emitted into the atmosphere.
It can do so notably by capturing the flared gas – a byproduct of oil production, which is often too complicated and expensive to transport, so it is simply released (flared) into the atmosphere, emitting dangerous air pollutants like black carbon, methane, and volatile organic compounds.
Some oil producers in Texas and Montana have already teamed up with crypto miners to help them comply with flaring emission reduction’s objectives, but the arrival of a very big player put even more emphasis on this practice.
Last month ExxonMobil reportedly launched a pilot program to power Bitcoin mining operations using the would-be wasted gas in its oil fields in North Dakota. With one of the world’s biggest oil producers, this trend is clearly getting traction.
On a smaller (for the moment) scale Easy Crypto Hunter in the UK use cow manure to power their miners, reducing methane emissions into the atmosphere. The meat industry contributes to the climate change in the most dramatic way, and for the moment it lacks motivation to take any action. With mining rewards as incentive, more methane factories with plugged crypto miners can see the day.
The world is running on energy, and unlike some poorly informed couch ecologists or European deputies may think, it is simply unrealistic to try and stop using it. What would be better for both humans and the planet is to make that energy the greenest possible, improving its distribution and efficiency.
Crypto mining can help the energy sector move forward, while using all the energy it gets in the most optimal way – to secure the network of independent money accessible to all and changing our societies for the better.
NFTs and Metaverse
Every picture needs a frame, and even better - a museum. NFT has become one of the most popular digital art forms, and while individual NFT galleries abound, the crypto world is yet to agree on a genuine NFT art museum.
Punk6529 might have just found the right approach. Quite important, albeit pseudonymous, figure in the crypto community, Punk6529 has launched a beautiful metaverse dedicated to NFT art, where they will expose their own impressive NFT collection, and allow other people do so.
The Open Metaverse Museum District is self-funded and open to contributions from developers all over the world - the strategy that has proven itself successful so far, as the Museum District is very easy and fun to navigate.
This may be the place where the future of art will be written.
This week Bitcoin price continued sliding past the psychological level of $40k to $39k, losing over 8%. From the technical analysis perspective Bitcoin is moving withing a slightly ascending channel with a bottom at the $37k level and a top at almost $49k. As it bounced off the local top 3 weeks ago, market santiment has been degrading, reaching “Extreme fear” by now - which may send buying signals to some.
In the meantime, Bitcoin grassroot adoption is as strong as ever, with Lightning Network (its layer-2 solution allowing fast and cheap BTC transfers) registers a x5 payment volume growth vs last year.
As to Ethereum, it has broken a psychological level of its own, sliding past $3k to $2’918 now, losing over 9% vs last week.
Quote of the week
“They’ve made very grandiose promises about how there’s safety-by-design in the Metaverse. But if they don’t commit to transparency and access and other accountability measures, I can imagine just seeing a repeat of all the harms you currently see on Facebook.”
Frances Hagen, whistleblower who exposed Facebook’s neglect for privacy and public safety, on Meta’s promises