Could Bitcoin Go Nuclear for its Power Needs?October 30, 2021
Numerous opponents of cryptocurrencies often take the issue of energy usage as their main centerpiece for scathing criticism. That issue has been around for some time now, but many began using it with even greater fervor this year, along with the – much needed – growing focus on energy cost and consumption fallout. Because of that, today, many quarters will underline that bitcoin and other proof-of-work cryptocurrencies come with a huge carbon footprint and are thus a major source of pollution. At the same time, the same energy use is also a big turnoff for new potential adopters who do not want to add to the same cycle of consumption and pollution.
However, the actual picture is much more complex. Aside from the fact that the majority of electricity that is used for crypto mining comes from renewable sources, there is also a potential for synergy between bitcoin and a much older cutting edge and divisive technology. That tech is nuclear power in the energy sector. Presently, there is a growing consensus that nuclear power has a big part to play in the future of humanity, despite its negative image in the global public arena. At the same time, that role could also extend itself to the crypto mining domain as well, even possibly spearheading the process of bitcoin going fully carbon neutral.
Mining Process and Energy
Cryptocurrencies, unlike fiat money, are secured through a cryptographic digital process. Fiat currencies, like the USD or EUR, include a complex system of foreign debts, local monetary measures, international relationships, economic circumstances, and central banks to assure and secure value. Cryptocurrencies use primary energy to achieve the same goal, which is then leveraged through a system of cryptographic activity on specialized computers. Now, in the world of esports, artificial intelligence, and similar ventures, it might seem normal that a digital undertaking has a digital background. But, cryptocurrencies and their setups are still very much unique.
These cryptographic systems are algorithms that run constantly through a computer network based on the blockchain principle. Presently, the most valuable crypto tokens, like BTC and ETH, all use the same principle, known as proof-of-work. The cryptographic network follows and writes down a precise, but distributed ledger of the movements of all tokens in these systems. However, while it is incredibly powerful, it is also very resource-draining, as it uses an ever-rising amount of electrical power to keep the same cryptographic system going.
In recent years, the value of cryptocurrencies in general skyrocketed. That process began at the end of 2020, following a massive crash that occurred in March of the same year. Back then, along with the start of the COVID-19 pandemic, the markets went through a massive crash in value, which took cryptocurrencies like bitcoin along on the ride. However, only a few months later, the scene began changing and evolving with new institutional investment and strong speculation about the potential of the crypto space in a matter of a few years.
Furthermore, discussions about the wider decentralized finance also began taking place. For the first time since cryptocurrencies got going, things like DeFi apps began to be something that corporations and even governments began taking seriously. Banks did the same, expanding their offer of financial options that are either directly tied to cryptocurrencies or to companies whose value moves up and down along with crypto. So, a lot more money began entering the crypto space and sticking there as well. That was a clear signal to many that the next leg of the crypto development is here to stay.
The rise in popularity of cryptocurrencies also meant a rise in the power consumption of the proof-of-work networks. Presently, the total power consumption of the bitcoin network stands roughly similar to the power used by the US state of Montana or the entire country of Sweden. That is the electricity distributed across the world in different crypto mines that support the BTC network. Here is where the potential of nuclear power plants comes into play. While the same type of energy has a negative connotation because of incidents like Chernobyl, Three Mile Island, and the most recent one in Fukushima, this energy generation is still completely carbon-free.
By using the heat from things like uranium fuel, the nuclear plants can generate steam for the electrical turbines without any carbon output. The only output from these plants, beyond the used nuclear rods and other nuclear fuel types, is steam. So, these plants are company safe from an ecological perspective as long as the fuel is recycled and disposed of safely. In 2020, energy from nuclear power plants generated half of all carbon-free power in the US. The same nuclear option would be a huge boon for the crypto networks as well.
There are two main advantages that come with the use of nuclear energy, including that for cryptocurrency mining. First, the power that is generated by nuclear fuel is incredibly reliable. The factor of reliability, in this case, includes the amount of power that a plant produces and how much it would be able to produce in theory if it ran non-stop. Nuclear power has the highest capacity in this reliability sense out of all other forms of energy generation. That is why so many label nuclear power as baseload electricity – it is always running, always up, and always producing what precisely it should be producing. It demands no outside delivery of fuel or any other elements needed for constant production, besides water that is used for energy transformation and cooling.
For any crypto mine, which is constantly running as well, this is a huge advantage. The second advantage includes the fact that nuclear power and the energy it believes is very dense and long-lasting. One fusion reactor will produce one million times the energy of any regular combustion, CO2 emitting reaction. Because of that, the footprint requirements of power based on nuclear reactions are very tiny. Of course, there is going to be an uphill public opinion battle with nuclear power, but the fact remains that crypto, just like the modern world, simply needs it right now.