Anyone who’s been tracking the cryptocurrency space knows that proof of work (POW) mining for cryptos such as Bitcoin, Ethereum, or Dogecoin requires a lot of cheap electricity. That’s because the POW mining process requires a lot of power to run the computer servers and the cooling systems to keep those servers from overheating.
Bitcoin miners in particular are relying on more powerful and faster computing rigs to give them a competitive advantage to be the first to solve increasingly complex, encryption puzzles – thereby earning Bitcoin. This has been the case ever since Bitcoin came into being in 2009.
Since then, Bitcoin miners have sought out the cheapest electricity in the world to boost profits and productivity of their massive servers and mining configurations. And so it went, through the middle of May 2021, until Tesla and SpaceX CEO Elon Musk sent this tweet.
This tweet slammed in reverse Tesla’s announced plans in April that it would accept Bitcoin as a method of payment for e-cars. Musk’s tweet also triggered a global discussion regarding the power needs of Bitcoin and Ether mining and the impact of those practices on the environment.
Over the past several months the frothy fervor and rapier rhetoric against Bitcoin’s supposedly negative impact on the environment has been stunning in its hyperbolic hysterics.
In that timeframe, Bitcoin miners have been driven from China, and the Digiconomist Bitcoin Energy Consumption Index found that the total Bitcoin carbon footprint exceeds the total greenhouse gas emission reductions of electric vehicles. So in other words – Bitcoin mining allegedly erased the environmental benefits of all e-vehicles globally.
Furthermore, if Bitcoin was its own country, its energy use would place it higher than Argentina, Sweden, and Ukraine.
Whether it’s all true or not, Bitcoin has a perception problem with its track record regarding environmental sustainability. That’s why some Bitcoin miners are deciding to go nuclear.
The Wall Street Journal has reported that some of the largest Bitcoin mining firms are teaming up with aging nuclear reactor companies in a bid to raise the fortunes of both industries. According to the WSJ, miners benefit from a readily available, abundant supply of cheap electricity that has no carbon footprint. While reactor owners are benefiting from a completely new customer base that’s willing to co-locate near the reactors, eliminating distribution costs.
This Bitcoin nuclear boost is perfectly timed for the nuclear sector which has been struggling during the past few decades. According to the World Nuclear Association website, nearly all U.S. nuclear generating capacity comes from an aging base of reactors that had been constructed between 1967 and 1990. Since 1977, there had not been a single construction start on a new reactor until 2013.
That was largely due to perceptions that natural gas generation was considered cheaper and safer after lingering fears from the partial meltdown of a reactor at Three Mile Island more than 30 years earlier.
Currently, nuclear energy provides approximately 13% of all electrical power in the U.S.
It’s worth noting that the $1.5 trillion infrastructure bill being voted on this week in Congress, has a few provisions to support nuclear energy generation. According to The Hill, the bill seeks to advance different types of energy, including nuclear power and fossil fuels where carbon emissions are trapped using high-tech methods and not released into the environment.
Specific to nuclear energy, the legislation would advance that form of energy through a $6 billion program from 2022 through 2026 that would invest in upgrading nuclear reactors to keep them running at optimal performance.
Additionally, the bill would provide technical and financial incentives to identify and build suitable locations for microreactors, small modular reactors, and advanced nuclear reactors in certain communities.
It remains to be seen if these two reputationally battered industries – Bitcoin and nuclear energy – can find a way to help each other boost their respective profits and perceptions.
On The Flipside
- Crypto critics are unlikely to cheer the marriage of Bitcoin and nuclear power generation despite the dramatic carbon footprint reduction for crypto.
- Opponents will most likely focus on the safety concerns of nuclear as the next Bitcoin boogeyman.
Why You Should Care?
This is arguably a brilliant move for nuclear power generation and Bitcoin. It will likely enable relicensing for declining reactors for another 20 years. That extended license will warrant necessary upgrades, which typically cost between $16-$25 million. This will be a positive for the US power generation infrastructure for years to come.