According to a recent report by the Crypto Council for Innovation (CCI), green Bitcoin mining could prove useful in the transition to renewable energy.
In fact, Bitcoin may help combat imbalances between energy supply and demand, and particularly those involving the gap between the demands for energy produced from zero-carbon sources and the production of energy itself.
Those who produce electricity using renewable sources often fail to optimize production by matching it to demand, and thus maximize profits. Bitcoin mining could help in this regard by allowing excess production to be monetized.
The report on Bitcoin mining
CCI’s report was titled just Proof of Work & Enabling the Energy Transition, and consists of a 39-page PDF chock-full of data about it.
The Crypto Council for Innovation is a kind of association that brings together many crypto operators, particularly from the United States, including for example also Coinbase, Fidelity Digital Assets, Gemini, OpenSea, Block and others.
The report was compiled through the collaboration of more than twenty experts, academics and industry professionals.
In particular, it highlights four possible actions to support the fight against pollution.
The first is a classic, that is, a strategy that has been talked about for quite some time. It involves using waste gases from hydrocarbon extraction plants (so-called flare gases) to mine Bitcoin. These are gases that are currently simply burned, whereas they could have a practical use for monetizing BTC mining.
The second is also nothing new, which is experimenting with new technologies for cooling mining farms, since it is estimated that 40% of the energy consumed by Bitcoin mining is used just to cool the machines.
The third, on the other hand, is something not yet fully experimented with, namely using Bitcoin mining as a support strategy to balance the instability of the power grid. Specifically, they hypothesize using any, but frequent, excess electricity inputs to the grid by using them to power real-time mining operations with a timing of 5 or 15 seconds.
The fourth is a long-term initiative to find new renewable energy sources that would add 3 GW to the US power grid.
The energy transition
By now it is clear that the energy transition from polluting to renewable sources is a matter of urgency, and paradoxically the energy-intensive mining of Bitcoin can be a major help in terms of investment and market support in this regard.
Indeed, large mining farms are flexible, consistent and transparent data centers.
The key point highlighted by CCI’s report is precisely about the necessary investments to finance the energy transition, adding Bitcoin mining to the portfolio of opportunities for those involved.
World leaders are currently debating Climate Week at the United Nations General Assembly, and this report aims to suggest some possible alternative solutions that would leverage Bitcoin mining itself in this regard.
The CEO of the Crypto Council for Innovation, Sheila Warren, hopes that the findings published within the report will help identify potential new pragmatic paths forward, as this is a key issue for everyone on the planet.
The investment problem
As is often the case, one of the main problems facing those doing innovation is finding sufficient funding to move forward.
In particular, the use of renewable energy appears to be effectively hampered by the lack of investment in adequate infrastructure, partly because of competition from traditional infrastructure.
Such investments are needed to solve some underlying problems, such as grid instability, electricity transmission challenges, and harmful by-products.
Particularly long-standing is the problem concerning fluctuations in renewable energy production with wind and solar due to daily and weather variations.
For example, the report cites the case of California, which in April simply could not use more than 700,000 megawatt hours of wind and solar power, which is an amount of energy with which more than 60,000 homes could be powered for an entire year.
In addition, clean energy produced in remote areas, often ideal for its production, often struggles to reach consumers.
Such is the case with wind power, which provides more than 75 percent of the electricity in 14 U.S. states but lacks sufficient transmission lines to transport that clean energy to the rest of the country.
This sometimes results in this energy being effectively trapped on the ground, and partially unused.
Bitcoin mining can lend a hand in addressing these problems, because it can attract from the market those investments that would otherwise simply not be there.
Bitcoin mining
The first concrete solution identified is one related to flexibility.
Indeed, making the load on grids powered by renewable sources flexible can minimize the imbalance between supply and demand. Bitcoin mining operations are flexible, both in terms of location and demand. They can, for example, access energy sources that are otherwise unrecoverable, or increase and decrease energy uptake depending on grid conditions.
The second is related to consistency.
Demand for energy varies according to various factors, such as time of day, climate, population, and so on. So renewable energy markets often face periods of low demand that affect market prices and business models. Bitcoin mining can act as a constant source of demand, reducing declines in electricity prices.
The third is transparency, as Bitcoin and cryptocurrencies provide a new paradigm whereby much public data can be used in real time to inform decision making and thus bring greater awareness and accountability.