Making Bitcoin energy efficient will take time, but it will be worth the wait
by Viktor Prokopenya, executive director of VP Capital
With the energy crisis affecting most industries, and the promise of crypto mining being able to adapt quickly to change blockchain power consumption, as reported in the recent Arcane report, this echoes my prediction of crypto mining catching up to achieve zero-emission technology in a few years.
There is a lot of noise about how cryptocurrency mining is harmful, but this is overstated.
A lot is done using renewable or wasted energy, for instance from nuclear power plants. Machine learning and AI also today consume lots of energy, but this does not mean they are bad – it will just take a few years to get to zero emission technology.
Companies such as Intel have filed a patent for a system-on-a-chip optimised to use less energy for mining, and enterprises like Samsung, Nvidia and AMD have made similar movements.
It is true that many cryptocurrencies are at the moment based on ‘proof-of-work’ or mining, and are not using energy very effectively, however this is also changing. Bitcoin and Ethereum have moved towards ‘proof-of-stake’ which is said to reduce 99% of energy consumption.
Crypto mining is uniquely suited to respond quickly to energy fluctuations due to its mutable locations, portability and adaptability.
As it stands, nodes are set up near the cheapest power sources – including unreliable sources such as hydroelectric, wind and solar plants, this can push energy production to be better distributed and decentralised. In turn, this could encourage investment in renewable energy sources and power storage for ‘greener’ more affordable energy.
Crypto is currently a very young technology, just over ten years old. We are moving from ‘proof of work’ to ‘proof of stake’ technology. So it will not need to take us a hundred years to develop clean technology, as it did with the first automobile.
Once low carbon energy can be rolled out on a larger scale and devices can measure supply and demand in real time, blockchain can be used to ensure power gets from producer to user without human intervention.
I am very optimistic with regards to how fast society and the world can adopt new technology around cryptocurrency, and get to zero emissions – the ideas are already there, and this problem will resolve itself in five years.