The flawed mining energy consumption debate, and start-ups need to shut it downMarch 2, 2018
Both blockchain tech and clean energy is actively progressing, and will definitely meet at some point.
The energy consumption complaint against cryptocurrency mining rages even more as the blockchain industry moves forward. Some say this is “a threat” to the future, while others maintain that this is a “growing pain” that we are going through before the traditional banking system is replaced.
“While no one can argue that Bitcoin (and other altcoins) mining consumes a lot of electricity (in absolute numbers) given that you need to run a network of few hundreds or thousands of very powerful computers all the time, the right way to look at this problem is not about the total consumption but to compare how efficient is Bitcoin relative to the alternative traditional centralized systems that we are predominantly using today and that one day crypto might replace,” SPiCE VC co-founder and managing partner Carlos Domingo wrote on Hackernoon via Medium.
He reiterates the flawed argument behind pitting VISA against cryptocurrency, where detractors fail to factor in the total energy consumption used up by the entire global banking system—which makes VISA transactions possible in the first place.
“Besides the fact that Bitcoin is not simply a piece of a payment network like VISA but a full currency system, VISA itself requires the banking system for its payment system to work so you need to actually include some of those costs there to make a meaningful comparison. So let’s look first at how VISA works.”
Despite these rational arguments, people still complain about the energy required by blockchain mining. But as we have mentioned before, a marriage between blockchain technology and renewable energy is bound to happen soon. Blockchain is in fact, beneficial to energy supply regulation, and it’s only a matter of time before clean energy supply becomes a very convenient, responsible, and substantially profitable ally to blockchain mining.
True enough, there are start-ups focusing on using renewable energy for mining blockchains, and vice versa: blockchains are being used to regulate energy supply. There’s sonnenCommunity in Germany, which enables a community’s members to store clean energy and distribute it to other members depending on demand. Their long-term goal is to eliminate the need for third party energy suppliers, to become an energy-self-sustaining neighbourhood.
And now there’s a start-up that is shooting to put an end to the electricity consumption fallacy: Moonlite.io is plans to establish data centers that tap on the supply chain for low-cost, purely clean energy for use on mining cryptocurrencies. “MoonLite presents an opportunity to hold a token in a new-generation, industrial scale cryptomining operation that is focused on efficiency by employing Artificial Intelligence and Custom Algorithms, and profitability by using low cost and clean energy sources,” Moonlite wrote on their whitepaper.
While we haven’t sufficiently done an intensive background check on the project (do a thorough research before jumping on any ICO’s), it’s not hard to see how this may become a trend. People should be looking at the progression of blockchain technology—or any technology for that matter, in relation to other emerging technologies. Although with so many start-ups looking to cash in on the crypto-boom, investors need to weed out all the noise and find legitimate projects.
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