Crypto mining can retire fossil fuels for good. Renewable energy projects are the future

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Despite the huge emis­sions caused by parts of the indus­try, not all cryp­to min­ing efforts have such large car­bon foot­prints, even when they use proof of work. Min­ing can rely upon solar, wind, hydro­elec­tric and geot­her­mal renew­able ener­gy sys­tems. To dis­cour­age car­bon-inten­sive cryp­to min­ing oper­a­tions, New York leg­is­la­tors have pro­posed a mora­to­ri­um to par­tial­ly lim­it cryp­tocur­ren­cy min­ing oper­a­tions that use proof of work authen­ti­ca­tion meth­ods to val­i­date blockchain trans­ac­tions. The mora­to­ri­um would not apply to min­ing oper­a­tions that uti­lize renew­able energy.

The Paris Cli­mate Agreement’s goal of Net Zero 2050 is ush­er­ing in an era of self-scruti­ny, as indus­tries exam­ine their own indus­tri­al process­es and car­bon foot­prints. One way to do this is to eval­u­ate the cra­dle to grave life­cy­cle assess­ment of a cryp­to trans­ac­tion. Some­times referred to as an envi­ron­men­tal life­cy­cle analy­sis (E‑LCA), this frame­work pro­vides a struc­ture for con­duct­ing an inven­to­ry and assess­ment of a product’s envi­ron­men­tal footprint.

Mov­ing towards a life­cy­cle assess­ment will also help com­pa­nies pro­duce data dri­ven ESG state­ments. As ESG stan­dards guide investors to green prod­ucts and ser­vices, more indus­tries, includ­ing cryp­to com­pa­nies, will con­duct a self-analy­sis of their own car­bon foot­prints and envi­ron­men­tal life­cy­cles. And good actors will be moti­vat­ed to assess and broad­cast their vir­tu­ous car­bon-free lifecycles.

Although most envi­ron­men­tal life­cy­cle-relat­ed dis­clo­sures are cur­rent­ly vol­un­tary, this could change. The Unit­ed States Secu­ri­ties and Exchange Com­mis­sion (SEC) has pro­posed rules for reg­is­trant com­pa­nies to con­duct Scope 1, 2, and 3 emis­sions inven­to­ries. If these pro­posed rules become law, pub­licly trad­ed cryp­tocur­ren­cies would need to under­stand their life cycle emis­sions inten­si­ty, from direct oper­a­tions (Scope 1), elec­tric­i­ty pur­chas­es (Scope 2), and indi­rect upstream and down­stream activ­i­ties (Scope 3) emissions.

Crypto mining as a catalyst for renewable energy projects

While there is always a fear that con­duct­ing an envi­ron­men­tal assess­ment might reveal “incon­ve­nient details,” it also rep­re­sents a unique opportunity.

Cryp­to min­ing com­pa­nies are often locat­ed near pow­er sources to feed their pow­er-hun­gry com­put­ers. As a result, cryp­to min­ing can be a cat­a­lyst or mar­ket dri­ver for new renew­able ener­gy projects. For instance, Dig­i­tal Pow­er Opti­miza­tion, in New York, now runs 400 min­ing com­put­ers from spare elec­tric­i­ty pro­duced by a hydro­elec­tric dam in Hat­field, Wis­con­sin. There are many remote geo­graph­ic areas where the ener­gy demand mar­ket is not large enough to sup­port a util­i­ty scale renew­able ener­gy site.

It is this sym­bio­sis of cryp­to com­put­er farms and remote green ener­gy projects which offers the poten­tial for mutu­al ben­e­fits — and it may not stop with rur­al projects.

Many cryp­tocur­ren­cy stake­hold­ers and enthu­si­asts expect the DeFi mar­ket to expand its reach into near space, the moon and beyond — and this idea is not far from being real­ized. A range of dis­trib­uted ledger tech­nolo­gies are already being con­sid­ered for the space domain.

A mul­ti-sig­na­ture Bit­coin trans­ac­tion has been demon­strat­ed on the Inter­na­tion­al Space Sta­tion. Oth­er com­pa­nies are mov­ing for­ward with var­i­ous space appli­ca­tions, includ­ing fundrais­ing, smart con­tracts, autonomous satel­lite com­mu­ni­ca­tions and blockchain appli­ca­tions for man­ag­ing a range of satel­lite assets in a decen­tral­ized and account­able way.

Per­haps one day in the future an orbit­ing space-based solar pow­er plant could gen­er­ate sev­er­al gigawatts of clean ener­gy and pow­er a range of blockchain appli­ca­tions in space.

Sev­er­al coun­tries, includ­ing Chi­na, India and the UK are seri­ous­ly con­sid­er­ing space based solar pow­er. As the world seeks decen­tral­ized, account­able and car­bon free tech­ni­cal solu­tions, it is this type of coop­er­a­tive part­ner­ship between clean ener­gy providers and blockchain appli­ca­tions that can answer the call.

Karen L. Jones is Space Economist at The Center for Space Policy and Strategy



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