Bitcoin as a decentralised value exchange mechanism has captured our imagination and interest in what crypto economies can bring. At the same time it has raised a number of concerns, especially around the staggering amount of resources that is needed to run this system. Actually, by some estimates Bitcoin is using as much energy resources as the whole country of Denmark, which is one of the most developed countries in the World.
Interestingly, Denmark is also one of the most advanced countries when it comes to renewables adoption. Renewables account for about 60% of its total power supply. Denmark did not get there by chance. Over the years Danish community has taken strong and forward looking decisions while other countries were sceptical. Perhaps, just like Denmark, the crypto community should not ignore the environmental impact Bitcoin and other cryptocurrency mining has got and take strong steps to ensure a sustainable future for both the technology and the planet.
This naturally raises a interesting hypothetical question — what if Bitcoin was power like Denmark?
Let’s take a closer look at the mining process itself.
Cryptocurrency mining (such as Bitcoin or Ethereum) is the process by which transactions are verified and added to the public ledger by solving mathematical computationally difficult puzzle. Anyone with access to the Internet and suitable hardware can participate in the mining process. Whoever first solves the puzzle gets to form and write the next block on the blockchain and to claim the rewards (transaction fees and newly released cryptocurrency, for instance Bitcoin).
As mining difficulty and transaction count increases, new mining facilities are established and more and more power is consumed. Therefore, with the increasing adoption of the currency, the electricity consumption needed to mine cryptocurrency and maintain the ledger grows. This creates a conflicting situation where on one hand the adoption of the technology shows how impactful and promising it is while on the other hand it scaling has a strong negative impact on our environment.
Solution — Green Energy?
You could imagine that most of people would answer this question simple by saying — use renewable energy (solar, wind and hydro). The Sun delivers more energy to Earth in an hour than we use in a year. We have wind and hydro where sun does not shine as much. Renewables are at the record high efficiency levels and installed capacity continues to grow rapidly. It seems that we have a perfect fit but it is not as straight forwards as it sounds.
Due to geographical reasons one cannot get green energy or at least buy it in the same quantities or constant supply everywhere. Some countries lack sunny days, others do not have right conditions for hydro power. In other countries it hard to justify green energy production from an economical perspective. We need a solution that could both utilize the existing energy infrastructure ensuring good and constant energy supply for all as well as a simple and accessible way to fund green energy development.
WePower — A Get Away Ticket
WePower is a green energy-trading platform, which connects green energy producers and energy buyers. It helps renewable energy producers to raise capital for green project development by selling energy production in a form of energy tokens. Energy token buyers get energy at the reduced cost because they buy it way in advance of its production. Each energy token represents 1 kWh of energy production and works as a power purchase agreement. Due to the use of blockchain, you always know what type of energy you are buying (solar, wind, hydro).
If WePower cannot deliver energy physically, purchased energy tokens can be traded or sold on the wholesale energy market under the current energy market price. This ensures that you benefit from investments in the green energy and promote green energy adoption.
WePower could help cryptocurrency miners buy green energy in the markets where it makes the most sense to produce green energy — the sun is shining, wind is blowing, country is rich of water resources. This makes investment in green energy profitable, promotes green energy and exit from investments in the green energy could cut electricity bills significantly. For example, if you have invested in green energy production X ETH using WePower, within 2 years you could get green energy worth of Y ETH. The margin amounts to 17%. This allows you to use proceeds from such investment to pay for your electricity/cut electricity cost and do good for the planet.
If Bitcoin is already using as much energy as some of the most developed countries in the world, we should all demand it to be as developed in terms of resources used as we are demanding developed countries to be. WePower is an example of a solution that can help harness the blockchain-driven technological change and at the same time make the world greener. Bitcoin and other crypto innovations are breakthrough innovations with a lot to offer. However, we should not put ourselves into the situation when we will have to invent a new planet to sustain it.
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