Green BTC
Written by @Doodle15, Edited by @RealScrout (Telegram @s).
Short history lesson…
Blockchain has found its application in various fields, from healthcare to supply chain and logistics. Thus it is rightfully considered one of the most notable inventions of the 21st century [1].
Most people consider Satoshi Nakamoto (Bitcoin creator) the pioneer in the blockchain field; this is not the whole story. Stuart Haber and W. Scott Stornetta are the first people to create and work on a cryptographically secured chain of blocks, where the document timestamp couldn’t be tampered with. This technology would later go on to become what is known today as blockchain [2].
Blockchain is a decentralized network run by numerous computers known as nodes. Every blockchain runs an algorithm that is needed to reach a consensus between all the nodes. Once a consensus is reached, a new block in a blockchain is generated. Multiple algorithms present: Proof of Work, Proof of Stake, Delegated Proof of Stake, Proof of Elapsed Time and Proof of Authority. Proof of Work (PoW) is the oldest algorithm, created back in 1993, which just so happens to be the algorithm that runs Bitcoin [3].
The Proof of Work algorithm validates the blocks via miners. When miners build blocks, they take the data from a block header and input a randomly generated nonce. This is called a hash. If the hash does not satisfy the solution, the miner discards it. A modern ASIC is a particular computer that goes through millions of hashes per second. This process requires a lot of electrical energy [4].
All Bitcoin miners are currently estimated to use around 121.36 terawatt-hours (TWh) a year. The energy consumption of the miners is set to increase as the unclaimed number of bitcoins deplete, making it harder for miners to mine. In comparison, countries like Argentina, the Netherlands and the United Arab Emirates consume less energy per year than the Bitcoin network ALONE [5]. Since most of the electricity generated in the world comes from burning coal, mining Bitcoin is not considered an environmentally friendly process [6].
We, at Lunar Station, have taken an interest to calculate what would it take to run Bitcoin miners on renewable energy.
In 2018 it was estimated that around 26% of all the electricity generated around the globe is done so via renewable energy sources. The most prominent sources of this energy are water, wind, and sun [8] (fundamentally all of them).
Solar energy
Solar energy is harvested using solar panels, also known as photovoltaic panels. These panels are semiconductor cells, which are, in turn, made of silicon. When photons hit these semiconductors, they release electrons which induces a current or, as we say, electricity [9]. The downside is that current technology makes the solar panels 23% efficient at best, while the majority of these panels stay under 20% efficiency [10]. For every 1 square meter, approximately 1.4kW (1400W) worth of photons interact with the surface; therefore, roughly 300W of energy per 1 square meter of conventional solar panels are harnessed.
Some calculations
A single solar panel produces around 500–550 kwh of energy per year [11]. Keeping in mind that Bitcoin miners use 120 twh per year, which equates to 120,000,000 kwh of energy, 240,000 solar panels would be required.
Since a single solar panel is 1.65m by 1m (65" by 39") [12], a total space of 396000 m² would be required, which is 0.396 km². This is roughly the same size as the Vatican — the smallest country in the world [13]; this is a relatively tiny area.
While the area is not the culprit of the non-environmentally friendly Bitcoin, the price of the solar panels certainly is.
It is roughly estimated that the price of solar panels ranges from 2.5 to 3.5 $ per watt. Meaning that it would require $48 billion to install this solar panel system, and that’s not considering the running and maintenance costs [14].
Although solar panels are environmentally friendly, their low efficiency does not allow them to be the best candidate for this application. As an example, hydro dams are 90% efficient in generating electrical energy [15].
On the other hand, many other crypto coins use different algorithms, which were mentioned in this article previously. These are far more environmentally friendly since they do not require the mining process [3]. So if the Bitcoin minting process can be changed (changing the mining process to some other mentioned prior), perhaps Elon won’t be so shy to front the costs to make it fully renewable himself. Just a thought…
Website: www.lunarstation.io
Telegram: https://t.me/lunarstation
Twitter: https://twitter.com/lunarstation_
Reference list
[1] CR-T (2020). New Technology: Top 12 Inventions of the 21st Century. [online] IT Services | CR-T — Utah. Available at: https://cr-t.com/blog/new-technology-top-12-inventions-of-the-21st-century/ [Accessed 10 May 2021].
[2] Goyal, S. (2018). The History of Blockchain Technology: Must Know Timeline. [online] 101 Blockchains. Available at: https://101blockchains.com/history-of-blockchain-timeline/.
[3] Chawla, V. (2020). What Are The Top Blockchain Consensus Algorithms? [online] Analytics India Magazine. Available at: https://analyticsindiamag.com/blockchain-consensus-algorithms/.
[4] CoinCentral (2018). What Is a Nonce? A No-Nonsense Dive into Proof of Work. [online] CoinCentral. Available at: https://coincentral.com/what-is-a-nonce-proof-of-work/.
[5] Criddle, C. (2021). Bitcoin consumes “more electricity than Argentina.” BBC News. [online] 10 Feb. Available at: https://www.bbc.com/news/technology-56012952.
[6] Our World in Data. (n.d.). Electricity Mix. [online] Available at: https://ourworldindata.org/electricity-mix/ [Accessed 10 May 2021].
[7] Digiconomist. (n.d.). Bitcoin Energy Consumption Index. [online] Available at: https://digiconomist.net/bitcoin-energy-consumption/.
[8] Center for Climate and Energy Solutions (2017). Renewable Energy | Center for Climate and Energy Solutions. [online] Center for Climate and Energy Solutions. Available at: https://www.c2es.org/content/renewable-energy/.
[9] Richardson, L. (2018). How do solar panels work? [online] Solar News. Available at: https://news.energysage.com/solar-panels-work/.
[10] Vourvoulias, A. (2019). How Efficient Are Solar Panels? (2019) | GreenMatch. [online] Greenmatch.co.uk. Available at: https://www.greenmatch.co.uk/blog/2014/11/how-efficient-are-solar-panels.
[11] Vikram Aggarwal (2019). How much energy does a solar panel actually produce? Electricity output explained. [online] Solar News. Available at: https://news.energysage.com/what-is-the-power-output-of-a-solar-panel/.
[12] SunPower (2019). How Many Solar Panels Do You Need: Panel Size and Output Factors. [online] SunPower — United States. Available at: https://us.sunpower.com/how-many-solar-panels-do-you-need-panel-size-and-output-factors.
[13] Synan, M. (n.d.). What is the smallest country in the world? [online] HISTORY. Available at: https://www.history.com/news/what-is-the-smallest-country-in-the-world.
[14] Modernize. (n.d.). Solar Panel Installation Costs | 2021 Solar Price Guide. [online] Available at: https://modernize.com/solar/panel-cost-calculator/ [Accessed 10 May 2021].
[15] wvic.com. (n.d.). Facts About Hydropower | Wisconsin Valley Improvement Company. [online] Available at: http://www.wvic.com/content/facts_about_hydropower.cfm/ [Accessed 10 May 2021].
