Trying to make Bitcoin a little more green
TeraWulf, a Bitcoin mining company in Minnesota, shall be the first in the United States to power its bitcoin mining operations using nuclear energy, based on a report by CNET.
The handling of operations will be at the newly built Cumulus Data’s data center, which will be entirely powered by the 2.5 GW Susquehanna nuclear power station located in Pennsylvania.
Being the first nuclear-powered bitcoin mine in the US, this means that any bitcoin mined through the center will emit absolutely no carbon.
Mining is important for Bitcoin because it is the only way to generate new coins of the cryptocurrency, but it requires huge amounts of energy.
To generate a new Bitcoin token, users or computers all over the globe race to solve complex mathematical puzzles, and the first to convey the correct answer will be rewarded the freshly-generated crypto coin. The more computational power you have, the higher the odds of solving the problem first.
This process is called Proof of Work system, commonly referred to as mining, and the users who solve the puzzle are called miners. As the years pass by, the puzzles have become harder to crack, and in an effort to be competitive, bitcoin miners set up warehouses filled with computer rigs solely dedicated to the process, gobbling up vast amounts of electricity. In 2022, it is estimated that the Bitcoin industry had emitted 86.3 million tons of carbon.
Since renewable sources of energy tend to be much cheaper, more and more bitcoin miners set up their operation near solar, wind and hydro energy farms. Over 55% of mined bitcoin uses renewable energy, a statement that crypto enthusiasts often make to justify that bitcoin is actually good for the environment as it encourages the use of renewable energy. However, the fact remains that Bitcoin’s emissions remain colossal, and nuclear energy is increasingly being considered as a method to reduce it.
Proof of Work
Bitcoin is mined via computers competing to solve a puzzle, a system called “proof of work”. Its main purpose is to make the cryptocurrency unhackable – you must have over 51% control of the computational power in Bitcoin’s network to overwhelm the system.
On the other hand, Ethereum last year switched from proof of work system to what’s called “proof of stake”, in which people deposit ether into the network for a chance to be picked to “verify” transactions, for which they are rewarded with ether tokens.
To compare, proof of work requires people to expend electricity in order to earn bitcoin, while proof of stake requires people to deposit money in the system in order to earn ether.
Ethereum’s switch to proof of stake system has resulted to its platform having reduced carbon emissions by up to 99%, something that Bitcoin could possibly do, but for now there are no significant proposals that Bitcoin could make the same switch anytime soon.
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