Could Brazilian hydroelectric plants be the solution to reduce CO2 emissions generated by cryptocurrency mining?
On April 9, Reuters reported that Chinese government is considering the elimination of crypto mining in the country, which hosts the majority of mining pools in the world.
The possibility of Brazil becoming a major international supercomputer base for cryptocurrency mining, following the example of the Lefdal Mine Datacenter in Norway, is something to be researched.
The fact that the country holds 12% of Earth’s surface fresh water and owns the Itaipu Hydroelectric Power Plant, the world’s largest clean and renewable energy generator, makes Brazil a perfect location to reduce carbon emissions from cryptocurrency mining which, according to scientists, could contribute to raising the planet’s temperature by 2 degrees Celsius in the next twenty years.
The mining process of the approximately 3,600 cryptocurrencies in operation is done using supercomputers in energy-intensive processes so that the hardware runs to the maximum of its capacity.
According to computer scientist Arvind Narayanan of Princeton University in the United States, these machines consume a very high amount of energy, equivalent to almost 1% of all the energy produced in the world.
Cryptocurrency mining rooms tend to build up heat, feeding the rooms’ cooling systems with increasingly hot air. So very aggressive cooling solutions need to be installed in the environment, and these units end up corresponding to another large portion of the energy consumption related to the mining activity.
What regulates the expenditure on electricity from the exploitation of virtual currencies is the their valuation: if they are worth a lot, the consumption goes up, if the value is low, it decreases.
In addition, another factor that contributes to high spending lies in the fact that specialist mining companies and bases have to invest heavily in environments with powerful ventilation systems that also end up consuming a lot of energy.
Seasonal analyses by Alex de Vries, the economist responsible for the Digiconomist, show a steep upward trend in energy consumption. In addition, research by the economist indicates that Bitcoin mining generates more CO2 than gold mining.
Mining of one kilogram of gold releases 20 tons of CO2 into the atmosphere, while with Bitcoin the same value can release up to 49 tons of the greenhouse gas.
Today, most mining is done in China, where coal makes up a large percentage of the energy grid.
The fact that hydroelectric plants are responsible for the production of about 70% of the energy available for consumption in Brazil, makes the country a strong player in reversing emissions to attract international investments in a sector of high technological complexity, like supercomputing.
Brazil is the third largest producer of hydroelectric power in the world, after China and Canada. In 2007, hydroelectric plants accounted for 83% of Brazilian electricity production.
In 2018, the installed capacity was 95 GW, representing 60% of the installed power generation capacity in the country.
The country is a co-owner of the Itaipu Hydroelectric Power Plant on the Paraná River, located on the Brazil-Paraguay border and it’s the second largest hydroelectric plant in operation in the world, with an installed capacity of 14 GW, through the production of 20 units of 700 MW each.
To get an idea of Brazil’s energy potential, all we need to do is compare its electricity consumption in billions of kilowatt hours with Ireland. In 2018 the Irish consumed 24 billion kWh; Norwegians consumed 133 billion; and Brazilians, 501 billion in kWh, about three times more than the two European countries put together.
In the comparison of energy production for 2017, the South American giant led by far: 590 GWh, while Ireland and Norway produced 30.4 GWh and 33.7 GWh, respectively.
I do not need to dwell on arguing Brazil’s case in this industry any longer.
Pedro Ribeiro, Bestkoin‘s co-founder