Renewable Energy

November 21, 2023 - Around 3 mins mins to read

What Is Renewable Energy?

Renewable energy, also known as sustainable energy, refers to energy sources that are not depleted and can be naturally replenished. Examples of renewable energy sources include solar, tidal, and wind energy.

In the field of blockchain technology, there has been a growing focus on renewable energy. This is due to the significant amount of energy consumed in cryptocurrency mining, which has become a global concern.

Blockchains are decentralized ledgers that validate, verify, and record transactions. They operate without a central authority and rely on consensus protocols such as Proof of Work (PoW) or Proof of Stake (PoS) algorithms.

Proof of Work involves solving complex equations in a digital environment, simulating real-world resource mining. Computers compete to solve transaction codes in a computational race to update and verify the network. Miners, specialized computers, mine cryptocurrency by creating new blocks every 10 minutes.

There are currently over 1 million BTC miners worldwide, along with millions of miners processing transactions for other Proof of Stake crypto networks. The energy consumption associated with crypto mining has raised concerns about its environmental impact.

According to the University of Cambridge, BTC’s energy consumption could range between 40 and 440 terawatts.

Cryptocurrency mining has played a role in driving the adoption of renewable energy. Miners seek locations with low-cost power to maximize their profits. This has led to the exploration of alternative energy sources and the recycling of mining energy by various startups.

Renewable energy offers several advantages, including its abundance and positive environmental impact. Sources such as solar, wind, and hydroelectric power can support miners in their operations.

One of the major criticisms of Bitcoin mining is its environmental impact. The carbon dioxide equivalent (CO2e) is used to compare the environmental footprint of different energy sources. For example, wind energy emits only about 9-18 grams of CO2e over its entire life cycle, while natural gas emits between 250 and 1000 grams of CO2 to generate 1 kWh of electricity.

Elon Musk’s decision to stop accepting Bitcoin payments for Tesla vehicles was driven by concerns about the environmental damage caused by mining.

Renewable energy sources also offer price stability. Unlike traditional energy sources, their supply is not limited, and their prices have consistently decreased over time. This has led to increased efficiency, production capacity, and economies of scale in the renewable energy industry.

According to the International Energy Agency (IEA), solar energy is currently the cheapest source of energy compared to coal and gas, which are still widely used by many countries.

Therefore, the cryptocurrency mining industry can greatly benefit from the use of renewable energy, creating a positive outlook for the industry as a whole.

Glossary