Amid last month’s heated debate over Bitcoin’s environmental impact, two companies are confident they have the answer on how to mitigate some of the negative effects: nuclear energy.
Nuclear-powered Bitcoin mining is part of a new wave of innovation of companies developing smaller reactors that they say would be faster and cheaper to build than conventional nuclear plants. These Bitcoin nuclear reactors can be small and would generate a lot of power without harmful emissions.
Bitcoin mining is necessary for releasing new Bitcoins into circulation. To help avoid fraud, miners authenticate transactions on Bitcoin’s blockchain. In return, miners are given new Bitcoin. Miners need to solve extremely complex math problems to verify transactions, which require a large amount of computational power.
“Right now, millions of Bitcoin mining devices around the world are generating 130 quintillion of such guesses every second of the day non-stop,” Alex de Vries, a financial economist who runs Digiconomist, told CNBC. “Combined, these machines are now consuming as much electrical energy as a country like the Netherlands.”
Bitcoin mining to go nuclear
Along with other clean energy sources like wind, solar and hydro, nuclear energy could be the best power source for Bitcoin mining due to its reliability, cheapness and carbon-free nature. It’s expensive to build nuclear power plants but it doesn’t cost much to run them. In many places, nuclear energy is competitive with fossil fuels as a means of electricity generation.
Mining companies around the world are planning to shift towards nuclear energy sources to reduce regulators’ concerns over the environmental impact of mining.
For instance, Power startup Oklo announced a partnership with Bitcoin mining and hosting firm Compass Mining to use nuclear energy for Bitcoin mining. The companies believe it’s an effort to reduce carbon emission from the mining process as well as a strategy to diversity energy sources used by the miners.
California based Oklo plans to offer almost 150 megawatts of nuclear power to Compass in the first phase of the partnership.
“Bitcoin is a huge market opportunity for clean energy generation, especially looking forward to new generation systems,” said Oklo Chief Executive Officer Jacob DeWitte, who founded the company in 2013.
Besides Compass, numerous other companies have also been moving to nuclear energy. The Bitcoin mining company Standard Power entered into a five-year partnership with a power producer Energy Harbor Corp to get carbon-free nuclear electricity to its Bitcoin mining center in Coshocton, Ohio.
As mining companies flee from China amid clampdown, Miami Mayor Francis Suarez offered nuclear power to Chinese mining firms and suggested setting up their data centers in the city. The mayor is looking to take advantage of excessive nuclear energy and seek to position his city as a hub for crypto mining activity.
Another option: a shift to proof-of-stake
For transaction validation, Bitcoin, Ethereum and several other coins require a lot of computing power and energy to solve complex mathematical problems. This process of transaction validation is known as proof-of-work. The shift to the proof-of-stake validation process could also help in ending the mining process. It is a transaction validation process in which investors lock up money in a network. The second-largest cryptocurrency Ethereum is planning to shift to a proof -of-stake transaction validation process after the launch of the long-anticipated Ethereum 2.0 next year, which will end the mining of Ethereum coin.
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