True cost of crypto
Cryptocurrency developers are working on reducing the huge energy consumption required for mining. Blockchain software outfit ConsenSys, for one, reckons it has developed a solution to reduce the energy requirements of ethereum to close to zero – and believes that could give the currency an edge over bitcoin.
Bitcoin mining could consumer more electricity in 2018 than the entire country of Argentina, Morgan Stanley said in a recent note to clients. It added that is expected consumption to be greater this year than that for electric vehicles in 2025.
"Bitcoin demand may represent a new business opportunity for renewable energy developers,” the bank said.
However, it’s at all not clear that renewable energy firms want to service miners. Canada has become one country of choice for those with bitcoin operations but local powerco Hydro-Québec said last week it is thinking of raising its rates for cryptocurrency mining firms.
The company says it has concerns about the size of some of the proposed projects which could lead to capacity issues.
And some observers argue in any case that green crypto is not on the horizon.
“The current mining process is indeed resource-intensive and wasteful, but there is no magic fix in sight,” says Michel Rauchs, cryptocurrency and blockchain lead at the Cambridge Centre for Alternative Finance. “Many would argue that it’s precisely the useless nature of cryptocurrency mining that keeps the system secure.”
He adds, “cryptocurrency mining comes at a cost in the form of custom hardware and electricity consumption.”