As the cryptocurrency market continues to boom, so does its energy footprint. Could a new power plant venture be the key to more sustainable cryptocurrencies?
Cryptocurrency mining farms have a voracious electrical appetite. In fact, by January 2018, a single Bitcoin transaction matched the energy consumption of the average US household per week. Currently, the vast majority of that energy comes from traditional power stations, although a new gang of cryptocurrency farmers are looking to change that.
4New is set to be the world’s first waste-to-energy power station that is dedicated to the mining of cryptocurrencies and entirely integrated on the blockchain network. We've seen other environmental blockchain projects, such as those linked to carbon offsetting and energy sharing in the past, however 4New is unique in coming up the idea of having its own power station, allowing it to support its operations in a clean and eco-friendly way.
After receiving waste from aggregators in the UK, 4new will place it into a highly pressurised combustion chamber which results in clean, recycled energy. The energy produced is then ‘tokenised’ as KWATT coins. Each KWATT coin will represent 1 kilowatt of energy produced by the power plant and can be used by coin holders either to farm cryptocurrency with 4New, or to sell it back to the UK National Grid.
The KWATT coins produced are capped at 300 million a year in order to match the energy production of their power plant, which sits at around 300 million kilowatts after taking into account maintenance and repair. 4New hopes to dedicate 35 per cent of its profits each year to the establishment of new power plants, increasing the longevity and scalability of the operation.
According to 4New, a power plant of their size could be used to power the annual operations of some of the largest cryptocurrency miners, specifically naming the Beijing-based Bitmain. Currently, this single mine requires 40 megawatts an hour to function - matching the 4New power plant’s output - and produces 24-40 tons of CO2 during that same 60 minutes.
As cryptocurrency farming becomes more mainstream, these figures are only likely to increase, especially as farms upscale their operations. However, 4New suggests that their system of matching energy consumption with energy production can usher in a new era of sustainable cryptocurrency projects that are no longer dependent on mainstream sources of energy. Of course, the biggest hurdle to this is being able to produce enough clean energy production to match the needs of a rapidly expanding cryptocurrency market.
Luckily, 4New does have plans for short term explansion. It is expecting its UK-based power plant and mining farm to become fully operational in late 2018, with a second power plant planned to open in mid-2019.