Renewable energy and cryptocurrency are two sectors that are presently seeing major growth. Although they’re certainly very different in many ways, there is also some overlap. For instance, as we’ve noted prior, there’s the expectation we’ll see far greater utilisation of blockchain in future in the renewable energy sector, just as blockchain is essential to the operation of the crypto industry today. But ultimately, although these two industries are surely fascinating for many people to learn about, there are indeed profound differences surrounding how they operate.
Yet while the renewable energy sector can operate just fine right now without cryptocurrency, there’s the recognition that renewable energy will be an increasingly important part of the growth of the crypto sector going forward. It’s why now is a good time to discuss the redefining of the relationship between cryptocurrency and renewable energy as it pertains to Australia, and a recent recommendation via the Australian Senate.
In order to understand the dynamics surrounding cryptocurrency and renewable energy, it’s first necessary to provide a quick overview of energy use surrounding cryptocurrency generally. In a nutshell, the mining of cryptocurrency like Bitcoin (BTC) occurs via the utilisation of sophisticated hardware which looks to solve very complex maths problems. This is a very energy-intensive process. Not all cryptocurrencies are mined, but many of the most prominent such as BTC are.
The industry appears only set to grow stronger in the years ahead. It’s certainly true there are some critics who contend cryptocurrency is a fad, but a number of indicators - such as many government’s moving closer to laws that ‘normalise’ the use of crypto, the increase in private companies accepting it as a form of payment, and even the visibility of crypto businesses which sponsor entities like professional sports teams and whole stadiums - suggest it’s here to stay. Accordingly, that means looking for ways in which the crypto sector can continue to use a lot of energy if need be, but doing so in a clean and green way, is vital.
Effectively nobody is going to come out and claim the cryptocurrency industry is powered by 100% renewables today. This said, the reality is because of the complex nature of the global industry at large, it can be hard to find shared agreement among researchers, for instance, surrounding just how much cryptocurrency mining is powered by renewable energy sources.
A previous report by the Cambridge Centre for Alternative Finance said 39% of BTC mining is powered by renewable energy resources. In another report, CoinShares held 74.1% of the electricity that the BTC network utilises comes from renewable energy. Clearly, there’s a difference in these two findings, and there are other stats out there that say something different still. Nonetheless, even if the view is taken the crypto industry is quite green, it can still go greener - and that’s why recent developments out of Canberra are notable.
A final report released by an Australian Senate committee in October recommended that crypto businesses operating in the nation receive a 10% discount if they sourced their own renewable energy to do their crypto mining. The report by the Senate Select Committee on Australia as a Technology and Financial Centre has since come to be viewed as a watershed moment for the cryptocurrency industry in Australia. Further particulars around that discussion as it pertains to crypto can be found elsewhere, yet raising awareness and growing dialogue regarding the dynamic between cryptocurrency and the renewable energy sector is certainly something that should occur amidst renewables enthusiasts, like those found among our readers here.
While the recommendation in the Senate’s report was just a recommendation, Senator Andrew Bragg who headed up the Committee said he’d wish to see the recommendations implemented within 12 months. Accordingly, were all the recommendations in the report to make their way into law, there’s the expectation the local crypto industry would get a real ‘shot in the arm’, and in turn, many crypto businesses could be looking at that 10% discount with a keen interest in taking it up, upon such time that it is officially brought into being in the near future.
The reality is Australia as it exists today is akin to a bridge over water that is eroding on both sides, and the country is facing a stark choice. On the one hand, it has the choice of trying to maintain a link to the past and the old industries that - however profitable they may have been - are ultimately set to decline rapidly in the coming decades, and perhaps in mere years. On the other hand, there’s the path towards the future, and while like starting anything new it takes a little courage to begin down that new road, there’s no doubt it’s the better course to take - and overall it’s the only viable one. Australia as a whole not only has to make the transition to net zero emissions by upping its capabilities in renewable energy, but each business needs to contribute to that transition by choosing renewable over fossil fuel whenever the opportunity allows.
In many ways, crypto is on the cutting-edge of 21st century technology. It’s for crypto advocates to make the case specifically for why it should be used more, yet - generally speaking - pro-crypto enthusiasts envision it as a positive, transformative, and inspiring innovation. So seeking to see crypto’s future growth occur exclusively with the use of renewable energy is surely in the interest of renewables enthusiasts and crypto enthusiasts alike. If Australia travels this path in future it would not only help drive the turn away from fossil fuels, but for crypto advocates, it’d also further evidence their contention that crypto technology is indeed a fantastic phenomenon that can usher in beneficial change for all.