Cryptocurrency has emerged as the next big thing in technology with the potential to disrupt international norms and transform how we value and use currency indefinitely.
The seemingly overnight meteoric rise in popularity of cryptocurrency has led to an exponential increase in demand for Bitcoin, Dogecoin, Ethereum and the myriad of others filling the digital currency space. Recently, El Salvador became the first country to formally adopt bitcoin as legal tender alongside the U.S. dollar, and Miami, Florida may be next.
As companies, countries and individuals continue to embrace and adopt cryptocurrency, the competition to generate more of it is giving rise to the expansion of cryptomining—the process by which new units of cryptocurrency are generated. It involves the use of special software by cryptominers (or “miners”) to solve increasingly complex mathematical puzzles. Miners who solve the puzzles are rewarded with fresh cryptocurrency.
The entire process is incredibly energy intensive—from powering large cryptomining operations to utilizing specialized hardware—individual miners are competing around the clock to solve increasingly complex equations and earn another unit of cryptocurrency. According to the University of Cambridge’s Bitcoin Energy Consumption Index, Bitcoin consumes approximately 121.36 terawatt-hours (TWh) annually, and the rate of consumption is unlikely to fall unless the value of the cryptocurrency decreases.
The increasing demand for electricity to power cryptomining has left miners to seek out cheap, large-scale energy sources—primarily fossil fuel generators. Currently, China hosts the majority of cryptominers, offering access to large amounts of power generated by the country’s coal plants.
But even here in the U.S. cryptomining has given retired coal plants a new lease on life as plants are restarted solely to serve as energy farms for mining operations. As a result, cryptomining is quickly becoming a significant driver of increased carbon emissions worldwide at a time when global efforts are focused on deep decarbonization.
“There are thousands and thousands of megawatts of demand coming, but it’s important to work with high-quality operators and recruit those operators to the right power sources in the U.S.” said Harry Sudock, vice president of strategy for GRIID and founder of Eastwood Analytics, during a panel on cryptocurrency at NEI’s annual Nuclear Energy Assembly earlier this month.
Sudock’s company is leading the charge to find more optimal energy sources to meet the needs of the cryptocurrency industry without causing carbon emissions to rise. Nuclear carbon-free energy is one such optimal solution. Because nuclear plants provide large amounts of carbon-free electricity 24/7, they are an ideal match for the energy consumption needs of the cryptocurrency industry.
“We’ve got a tremendous opportunity to continue to leverage the characteristics that we have always had: safe, reliable, carbon-free electricity,” explained Sean Lawrie, partner at ScottMadden.
That potential for an ideal partnership with nuclear energy inspired the mayor of Miami, Florida recently to leverage the large-scale carbon-free power generated by its nearby nuclear plants in order to lure cryptomining operations to the city.
As demand grows for cryptocurrencies including Bitcoin, the cryptocurrency industry will require a reliable, carbon-free partner to meet its enormous energy demand. Nuclear energy is that optimal partner—ready and able to supply the cryptocurrency industry’s operations with abundant, reliable carbon-free power.