The end of 2021 saw the first major indications that the world is slowly sliding into a serious energy problem. That situation would be called the European energy crisis later on, but the data that things were not going well were present nearly a year ago. Through a special combination of factors, which would be called the perfect storm by some analysts, the same process moved from an economic possibility to a real-world certainty. Because of it, 2022 began with many worrying that the problems with energy supply in the Old Continent, but across the world as well, could become a huge issue in a matter of months. That worry was put in overdrive with the end of February and the start of the Russian invasion of Ukraine.
Now, the issues of gas and oil supply coming from the Russian Federation are not just a huge everyday problem, but also something that is drastically impacting the near future as well. In the shadow of these huge geopolitical events, the domain of cryptocurrency mining is also taking notice. While the energy crisis has multiple implications when it comes to the process of crypto mining and maintenance of mining facilities, it also offers a possible way for the same process to reach the mainstream audience. Through that, a whole new chapter of low-scale crypto-mining could open up as well as influence the trajectory of sustainable energy development.
Crypto Power Consumption
Long before the start of the energy crisis, the domain of cryptocurrencies plunged into a miniature energy issue of its own. That happened nearly a year ago, in the middle of 2021. Back then, Elon Musk, the CEO of Tesla declared that the company, which suddenly adopted cryptocurrencies on a massive level, would no longer develop systems for crypto payments. Prior to that, Tesla Motors opened up the possibility of paying in bitcoin for its new vehicles. However, all of the sudden, Musk declared that crypto, and bitcoin, in particular, is a technology that is consuming too much power. As it does the same, the same energy comes from sources that are completely fossil-based and which produce a lot of excess CO2.
That in turn produces a stronger influence on the already very negative processes of climate change and global devastation that this produces. With the reaction of Elon Musk, which many found not to be genuine and more akin to a shrewd business than actual environmental concerns, the reaction of the public came in force as well. That resulted in a massive fall of crypto prices and market caps, which made a bear market almost single-handedly. All the while, the actual narrative is quite different and includes factors that actually help in fighting climate change, not in the process of exuberating it. That narrative is presently becoming clearer across the board and in many different quarters, not just early adopters like esports players or libertarian-minded individuals.
As soon as the narrative from Elon Musk began to be shared, many were quick to point out that bitcoin at least is mainly using energy from renewable sources. Some estimates placed that number to over 78 percent even in the middle of 2021. Today, that number is a lot higher. The reason for this is not the simple fact that Elon Musk put additional pressure on the industry to use these renewable sources, but because it simply makes financial sense. Renewable energy sources are cheaper in the long run and demand a relatively high level of initial investment, But, that is not a problem for many mines that already have a lot of excess funds that they are looking to invest into their operations.
That is why so many mining pools began placing a lot of money into renewable energy sources long before it was trendy to go green on a corporate level. It made financial sense years ago and it makes even more financial sense today. Furthermore, the energy crisis of late 2021 showed that the price of fossil fuel-based energy will likely continue to rise, while renewable resources will continue to go down, especially when it comes to low-level tech solutions like regular solar panels. As more and more of these become accessible, so does crypto seek out green solutions to improve the climate and improve their bottom line all at the same time. However, the true opportunities for crypto still await on a much more diverse playing field.
In Europe, the war between Ukraine and Russia is pushing the EU to look for energy alternatives. That includes alternative energy sources for Russian natural gas. It currently provides something close to 40 percent of EU needs and much of that goes to the heating of personal homes, offices, industries, and all other locations where people tend to spend time during the cold months.
For individuals, crypto mining rigs will become an alternative source of heat production. These utilize electrical power – which will become reliant on renewable sources – and produce heat. However, crypto-based heating produces excess heat from the GPU elements, but it also produces cryptocurrency. The same could offset in a positive direction the bills of users as well. So, it could be expected that in the next winter season, many homes in the EU will begin exploring the crypto heating option. This might not be the first choice for many residents, but it will become if natural gas becomes both scarce and very expensive.
Bitcoin for Power
The final element of the same changing balance of power when it comes to energy production is the process of financial support. With bitcoin and other digital currencies, people in the developing and underdeveloped world would be able to get direct, crowdfunding support on a level of individual backers for their renewable energy production. A person in the western nation could directly subsidize a household in the equatorial region with crypto and without any mainstream banking service, to attain and install solar power. That alone could be a small and silent revolution in applied renewable technology and a big ally in combating climate change.