Cryptocurrencies like Bitcoin are working for more than a decade, and they function much similar to regular money. The difference is just that they are not managed by the government or banking systems. Hence, the cryptos are decentralized and use miners for the validation of the transaction.
Without going into detail with Bitcoin mining, let’s focus on its energy consumption. To be precise and straightforward, more is the computational power; more will be the requirement of the energy.
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Due to the scaling up of mining operations, the demand for base-load power has increased. Bitcoin mining requires a massive amount of energy. According to the data, Bitcoin mining consumes nearly 105 terawatt-hours of energy per year globally. So, we cannot solely depend on only non-renewable energy sources.
Additionally, Bitcoin mining is known to promote global warming by producing CO2. Hence, geothermal energy has a considerable role to play. Being renewable, geothermal energy can provide the power required for mining round the year.
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Although renewable energy sources like solar energy, wind energy can be used for mining, their capacity factor is limited. So, technically, we are left with only geothermal energy as a future of mining because of their high capacity factor.
The geographic location does not restrict crypto mining, and hence it is not limited by the distance from the consumers. The facilities of mining can be employed anywhere across the world. This requires the development of off-grid geothermal power plants that would allow the developers to commercialize the geothermal potential.
Recently, on June 9th, El Salvador planned to use volcanic energy to mine Bitcoin. It is being said that energy from the volcanos is 100% renewable and 100% clean. The step was taken keeping in mind the harmful effect of Bitcoin mining on the environment.
So, how the volcanic energy can be used? It is pretty simple; the heat present in the volcanos heats the underground water, which creates a rush of steam. That steam can spin the turbines to generate electricity, and that electricity can further help in Bitcoin mining. Isn’t it simple?
El Salvador derives more than 65% of the electricity from renewable sources of energy. The geothermal capacity of the country is currently more than 200MW.
The use of sustainable energy sources for mining is not new; Iceland is a popular case using cheap and sustainable energy sources. But the growing approaches towards clean and renewable sources for Bitcoin mining clearly indicate that more people are now concerned about the environment, which is a good indication.
The use of Bitcoin is particularly crucial for any country to grow and develop. The growing attention towards removing its limitations is a good thing to see in 2021.
Note: This report is primarily focused on how we can use geothermal energy for Bitcoin mining. To read more about Bitcoin mining and the involvement of energy in the mining process, refer to the above-mentioned links.