Recently, there have been many comments on the impact of Bitcoin on the environment, and mainstream media have been keen to claim that Bitcoin’s consensus mechanism (PoS proof of work) is a potential threat to the future environment of the earth.
In a recent white paper published by two well-known institutions, Square and ARK Investment, some of the arguments on the “Bitcoin Clean Energy Initiative” put forward opposite views, pointing out that Bitcoin is actually “the key driver of the future of renewable energy.” .
The research report pointed out that Bitcoin mining and renewable energy together promote the “energy transition.” Therefore, the energy asset owner may be a “future bitcoin miner” operating a flexible grid, and bitcoin mining tools have the characteristics of being able to support this new energy model.
First, as the white paper claims, miners are geographically uncertain, with flexible and easily interruptible loads.
Therefore, they are “unique energy buyers” who can face the main challenge of low production and intermittent growth when demand in the clean energy sector rises.
The white paper states, “On the other hand, Bitcoin miners are an ideal supplementary technology for renewable energy creation and storage. Combining power generation with storage and miners has a better overall value proposition than building power stations and storage stations alone. “
At the same time, Bitcoin uses the cleanest and cheapest energy. The Horizontal Cost of Energy (LCOE) is a measure of how high the cost of producing an energy source is. In the past ten years, the production cost of solar and wind energy has declined. .
The white paper claims that the cost of solar energy has dropped by 90% and wind energy has dropped by 71%. Therefore, without the intervention of external factors (such as subsidies), the costs are 3 to 4 cents per kilowatt hour and 2 to 5 cents per kilowatt hour, respectively.
In contrast, the same indicator (LCOE) for fossil energy coal and natural gas is 5 to 7 cents per kilowatt hour. The study added that “solar energy and wind energy are now the lowest cost and most scalable energy sources, and more importantly, we believe that they will be more widely used over time.”
Bitcoin mining can be used as a “complementary” technology to use these cleaner and cheapest energy sources. The white paper believes that the combination of the above methods and methods of storing energy may lead to clean energy projects becoming a “profitable field”, bringing benefits to investors.
More flexible construction of solar and wind energy projects. When the “relevance study is completed”, with the sustainable development of Bitcoin mining, Bitcoin mining can explore the integration with the main energy grid, which can be used in the “black swan event” It is flexible and provides “always available excess output” for the energy grid.
Because the miners’ “unlimited appetite” can absorb these “excess” energy, and store it with lithium ions, it can maintain its capacity to meet the daily needs of consumers. The white paper pointed out that from a long-term development perspective, as the use of electric vehicles increases, the demand for electricity supply will be greater.
The model proposed by Square and ARK Investment Company can facilitate the deployment of solar and wind energy resources. At the same time, it allows Bitcoin mining to enter a “quite large” and greener industry. Research points out that if there are no miners, it is estimated that 40% of the power grids can only meet demand by raising prices, and the emergence of miners makes the power grid more beneficial Be graphable and sustainable.
The white paper states that “As Bitcoin mining is integrated into the solar system, energy providers, whether as utilities or independent entities, will have the ability to arbitrage between electricity prices and Bitcoin, and it is possible to sell’excess’ solar energy without reducing it. Satisfy all electricity needs while maintaining profitability.”
As of the publication of this report, the transaction price of BTC was US$55,394, a decrease of 1.8%. In the weekly and monthly data, the loss of Bitcoin was 12.9% and 3.8%, respectively, and the market value was US$1.3 trillion.
Author/ Translator: Jamie Kim
Bio: Jamie Kim is a technology journalist. Raised in Hong Kong and always vocal at heart. She aims to share her expertise with the readers at blockreview.net. Kim is a Bitcoin maximalist who believes with unwavering conviction that Bitcoin is the only cryptocurrency – in fact, currency – worth caring about.