Boden, Sweden — A modern gold mine quietly nestled in snow-covered Lapland, Sweden. But instead of picks and shovels, it’s full of thousands of computers.
These machines, known as mining rigs, work 24 hours a day to find new units of cryptocurrencies — in this case. EthereumThe second largest token in the world.
To do this, you need to compete with others around the world to find answers to complex math puzzles that become more difficult as computers called “miners” join the network. The purpose is to secure the system and prevent fraud.
This Ethereum mining facility is operated by Hive Blockchain, a company focused on mining cryptos using clean energy.
Benjamin Hall | CNBC
The entire process is underpinned by what is called the “proof of work.” And it consumes an incredibly large amount of energy. BitcoinThe world’s largest digital currency, also uses this framework.Now it consumes As much energy as the whole country..
Governments around the world are raising concerns. Some countries, such as China, Prohibit cryptocurrency mining completely.
The mine in question is a warehouse-like building in the military town of Boden, accommodating a total of 15,000 of these mining rigs. At 86,000 square feet, it’s larger than a standard soccer field.
The facility is operated by Hive block chainA Canadian company focused on using green and renewable energy to mine crypto.
With an area of 86,000 square feet, the Swedish mining facility in Hive is larger than a standard soccer field.
Benjamin Hall | CNBC
Hive’s operations in Sweden are powered by a local hydroelectric power plant in Boden, in the north of the country. The area is famous for its cheap and renewable electricity surplus.
“In northern Sweden, 100% of electricity is either hydro-based or wind-based,” said Johan Eriksson, Hive’s adviser. “100% playable.”
Cryptocurrency miners are using excess energy capacity that would otherwise have been wasted, according to Ericsson. In other words, it is not necessary for homes in this area.
However, the enormous amount of power needed to perform a hive-like operation surprised the authorities.
Known as mining rigs, these machines are up and running 24 hours a day to find new units of cryptocurrencies.
Benjamin Hall | CNBC
The Swedish financial oversight agency Finansinspektionen is calling on the European Union to ban cryptocurrency mining because of its enormous energy usage.
“Cryptocurrency producers are keen to use more renewable energy and are increasing their presence in the Nordic region,” the agency said. statement last year.
“Sweden needs renewable energy targeted by crypto producers for climate change in our critical services, and increased use by miners threatens our ability to meet the Paris Agreement. increase.”
Zumo, a crypto company based in Edinburgh, is part of CryptoClimate Accord, a coalition of companies aiming to achieve net-zero emissions in the crypto industry by 2030.
Kirsteen Harrison, Zumo’s climate policy adviser, said the initiative is working on software that can validate the energy sources used to mine cryptocurrencies as renewable energies.
“Currently, there are quite a few tests on it,” she said. “If it succeeds, hopefully it will be filtered out to the rest of the sector.”
According to some activists, simply decarbonizing cryptocurrency production may not be enough.
Greenpeace and other environmental groups Call on the Bitcoin community to replace the proof of work mechanism Instead, use what is called the “proof of stake”. This reduces the enormous computational cost of validating new crypto transactions.
Ethereum is currently in the midst of a long transition to Proof of Stake, and proponents of the move say it will reduce its energy consumption by more than 99%. And other ciphers like Cardano and Soran are already working on the Proof of Stake network.
But, as Harrison explains, keeping cryptocurrencies like Bitcoin away from Proof of Work is not as easy as it sounds.
“I don’t think there is an option to abolish Proof of Work just because one player doesn’t control the system,” she says.
Hybe and other crypto companies are increasingly looking to green energy to revitalize their businesses, but many have not yet participated in the transition to renewable energy.
Some are Intentionally use gas Otherwise, it is flared, for example, to generate power for crypto mining.
Since China banned cryptocurrency mining, Bitcoin proponents have hoped that this would make cryptocurrencies more environmentally friendly.
but, Peer-reviewed studies Bitcoin mining, released in February, became heavily soiled only in 2021 and is actually mined in areas that rely on coal and other fossil fuels, such as Kazakhstan and southern US states such as Texas and Kentucky. People are flocking.
Part of the problem is the decentralized nature of cryptocurrencies like Bitcoin. Currently, there are various groups claiming to represent the industry, but Bitcoin does not have central authority and anyone can join the network.