How Can Bitcoin Help Solar Energy Gain More Visibility?
Key Insights
- Bitcoin mining is energy intensive.
- Solar energy provides a viable alternative to electricity-powered mining.
- Blockchain has an important use case for solar energy producers and can increase its visibility.
Over the years, there have been mixed reactions to the role of renewable energy in BTC. Similarly, there has been a call for the jettison of using electrical power in Bitcoin mining— and switching to solar energy due to the huge energy consumption.
Energy consumption is expected to keep growing. However, research and experts largely opine that solar energy is the best alternative to excess energy consumption and reducing environmental damage.
On this premise, industry players seek to identify the benefit of solar energy and how BTC can help solar energy gain more visibility.
BTC Mining Using Solar Energy
The first most prominent blockchain network is Bitcoin (BTC), created in 2008. The Bitcoin protocol uses the proof of work mechanism to add new blocks and solve complex mathematical equations. Similarly, it uses the mechanism to verify the validity of new transactions.
However, this proof of work mechanism involves mining. The miners engage in computational work to find hashes and get rewarded. The process of finding these hashes consumes as much power as possible.
The Digiconomist's Consumption index says BTC transactions take about 1,449 kWh. One Bitcoin transaction consumes as much electrical energy as 50 days of power used in an average US household.
For instance, a Grist article released in December 2017 estimates that the Bitcoin network will consume more electricity at this current growth rate than the United States. Similarly, a report shows that Bitcoin mining has caused instability in the electricity grid in Venezuela.
Looking at this amount of energy consumption and the increase in BTC mining activity, there is a need to have a viable alternative. This is where solar energy becomes important. When large BTC miners switch to solar energy, the impact on electricity usage will reduce.
How Will BTC Help Solar Energy Gain Visibility?
The first issue is the environmental damage and implication that mining causes. The Capital Counselor says there are approximately 1,000,000 BTC miners in the world.
This number underscores the impact of energy usage on these miners. Therefore, the earlier miners start using solar energy, the better.
Blockchain technology has many use cases to advance solar energy. They include enabling peer-to-peer energy distribution via mobile Bitcoin mining servers. Instead of electricity-powered mining pools, they will run on solar farms.
Similarly, blockchain technology has the potential to verify and compensate for the production of solar energy. The technology has the potential to simplify the process of connecting solar energy producers with consumers— who require access to sustainable energy.
Interestingly, an Australian startup, Power Ledger, deploys this blockchain use case. The startup noted that the service immediately pays solar energy producers for what they produce.
Conclusively, there are expectations that more startups will embrace the use case and increase solar energy visibility.
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