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The crypto industry wants to go green — that’s easier said than done


BODEN, Sweden — Tucked away in snowy Swedish Lapland is a modern-day gold mine. It’s not filled with picks and shovels; it is filled up with thousands of computer-controlled computers.

These machines, known as mining rigs, are working around the clock to find new units of cryptocurrency — in this case, ethereumThe second largest token worldwide is the.

In order to do this, they will have to compete against other computers around the globe to discover the solution to a difficult math puzzle. The problem becomes increasingly complex as more “miners” join the network. This is done to prevent fraud and ensure security.

Hive Blockchain runs this ethereum mining site. They are a company that uses clean energy to mine cryptocurrency.

Benjamin Hall | CNBC

It is called “proof-of-work” because it supports the entire process. This takes up a tremendous amount of energy. BitcoinThis framework is also used by, which is the largest digital currency in the world. The framework now allows it to consume as much energy as entire countries.

All governments around the globe are becoming more concerned. China and other countries have even gone as far as to ban crypto mining outright.

Renewable energy

Hive’s Swedish mining facility measures 86,000 sq. feet. This is more than the size of a soccer pitch.

Benjamin Hall | CNBC

Hive’s Swedish operations are powered by the local hydropower station in Boden in the northern part of the country. This region is well-known for having a surplus of renewable, cheap electricity.

Johan Eriksson from Hive said that 100% of power in the northern part of Sweden is hydro- or wind-based. It’s 100% renewable.

Eriksson says crypto miners are using excess energy capacity that would have otherwise been wasted — in other words, it’s not required by households in the region.

Officials have been alarmed at the sheer power that is required to manage operations like Hive.

They are also known as mining machines and they work around the clock to discover new cryptocurrency units.

Benjamin Hall | CNBC

Finansinspektionen (the Swedish financial watchdog) is asking the European Union not to allow crypto mining because of its large energy consumption.

According to the agency, “Crypto-asset manufacturers are eager to use renewable energy and they are expanding their presence in Nordic Region.” statementLast year.

“Sweden requires the crypto-asset producers’ renewable energy for our climate transition services. Increased use of miners is threatening our ability to comply with the Paris Agreement.”

Is decarbonization enough?

Zumo, a cryptocurrency firm based in Edinburgh, is part the Crypto Climate Accord. It’s a group of companies that aims for net zero emissions in crypto by 2030.

Kirsteen Harrison is Zumo’s climate advisor. The initiative is currently working on software that could verify where the energy was used to mine crypto.

She said that there are a lot more trials being conducted at the moment. If that succeeds, it will hopefully spread to other sectors.” 

Some activists believe that simply decarbonizing production of cryptocurrency may not suffice.

Greenpeace, Greenpeace International and other environmental groups can be reached at calling for the bitcoin community to replace its proof of work mechanismInstead, use one called “proof-of-stake”. This would eliminate the enormous computational costs of verifying crypto transactions.

Ethereum is in transition to proof-of-stake, which advocates claim would lower its energy use by more than 99%. Cardano, solan and other cryptos already work on proof of stake networks.

Harrison explained that it is much easier to move a cryptocurrency such as bitcoin from the proof of work than it sounds.

“I believe it’s impossible to get rid of proof of work. This is because there are not enough players in the system,” she said.

It’s not all on board

Hive and the other cryptocurrency firms have begun to use green energy more often to power their operations. But there’s plenty of people who don’t support this transition to renewables.

Some of them are deliberately using gasOtherwise, it would be used to produce electricity for cryptomining.

The backers of bitcoin hoped the Chinese ban on cryptocurrency mining would allow them to make their currency greener.

But, a peer-reviewed studyA February study found that mining bitcoins got more dirty in 2021. This was due to miners moving to places like Kazakhstan, Texas, and Kentucky, which are heavily dependent on fossil fuels.

One problem with cryptocurrencies such as bitcoin is their decentralized nature. Although there are many groups claiming to represent this industry, Bitcoin does not have a central authority. Anyone can join the network.