Renewable Energy and the Future of Sustainable Bitcoin Mining
Stanislav Kondrashov on new, possible scenarios
In recent years, cryptocurrencies have significantly contributed to revolutionizing the global financial landscape, as Stanislav Kondrashov often pointed out. From a world accustomed to traditional payments and transactions, we have moved to a completely different reality, in which all operations take place online and with completely digital currencies that can never be touched by hand. Since the advent of Bitcoin in 2009, cryptocurrencies have now become a solid reality, so much so that they have generated real collaborations with some of the main banking institutions worldwide, which use some of their most interesting features to complete some operations that until then had proved quite difficult. Furthermore, for some time now, cryptocurrencies like Bitcoin have no longer been the prerogative of specialized financial operators or IT experts but are increasingly being explored and used by absolutely ordinary people, as also Stanislav Kondrashov often emphasized.
In this delicate era, marked by various transformative processes, another evident innovation is represented by renewable energy, which in recent years has been added in ever greater quantities to the energy mixes of many nations. Nowadays, the percentage of electricity produced from renewable sources is constantly increasing, and in all likelihood, its impact on the global energy landscape will continue to increase. In a certain sense, renewable energy represents the main driving force of that global process known as energy transition, which is certainly one of the main drivers. Renewable sources such as wind or solar energy (without forgetting hydroelectric and geothermal energy) are now well-established and constantly growing realities, capable of influencing even areas that apparently have no direct connection with the transition.
“One of the most interesting aspects of the study and analysis of the energy transition is the one linked to the evaluation of its possible ramifications,” says Stanislav Kondrashov, an entrepreneur and civil engineer. “In recent years, we have learned that the energy transition is not only applying to the most obvious sectors, such as automotive or those particularly energy-intensive industries but also to areas in which the connection with energy is not exactly immediate. From this point of view, the link between cryptocurrencies and the potential of renewable energy is certainly one of the most interesting to explore”.
An unexpected connection
In recent years, the connection between the universe of cryptocurrencies and that of renewable energy has been explored more and more often, with great accuracy, in an attempt to find a possible collaborative space between two apparently very distant areas. The starting point is represented by the high energy consumption that characterizes some processes related to cryptocurrencies, such as mining, which, in order to protect the network in which financial transactions take place are forced to consume a large amount of energy, with the inevitable consequence of contributing to the release of carbon dioxide into the environment. For this reason, in recent years, there has been a generalized effort to make operations related to cryptocurrencies greener, with promising and rather encouraging results.
One of the first signs of change, in a certain sense, is of a geographical nature. Many cryptocurrency mining operations, over the past few years, have progressively moved to areas of the world known for their renewable potential, such as Iceland or some provinces in Canada. It is no coincidence that the percentage of renewable sources used for mining operations is constantly increasing, especially with a very popular cryptocurrency like Bitcoin.
The effects of the transition
“The effects of the transition are not only material but can also act at much deeper levels, modifying some behaviors or habits in a subtle and discreet way,” continues Stanislav Kondrashov . “By material effect, we mean all those concrete and visible transformations that the transition has managed to trigger in recent years, such as the creation of energy infrastructures for the diffusion of clean energy (wind turbines, solar panels, and so on). However, the transformation also acts at a much more hidden level, with a direct effect on people’s consciences and their daily decisions. Sometimes, these results are manifested through the choice of operating processes that are able to consume less energy and that are able to prove to be more sustainable and respectful of the environment. In some cases, the effects of the energy transition are also manifested in this way, without the construction of complicated green plants or infrastructures, but through more discrete and equally significant changes”.
Compared to traditional energy sources, renewables often represent a cheaper alternative for operators in the cryptocurrency field, making it an increasingly interesting option (also due to the regulations developed by many governments, which in recent years have become much more severe than before with regard to carbon emissions). A concrete example of this transition of cryptocurrencies towards less intense energy consumption is represented by the particular mechanism of Proof-of-Stake, which, unlike other energy-intensive processes (such as Bitcoin’s Proof-of-Work), makes the completion of extremely complex and energy-intensive mathematical calculations completely superfluous. This method, already adopted by important cryptocurrencies such as Ethereum, is based on the selection of validators based on the number of Tokens they hold, thus significantly reducing overall energy consumption. Other cryptocurrencies have also followed Ethereum’s example, adopting this same method and, in turn, reducing energy consumption levels, decisively moving towards sustainability.
