A key factor in the success of the Mining business is access to a source of cheap electricity. The prices for crypto-currencies grew all last year, and in search of opportunities to increase capacity, miners began to look towards renewable energy.
The plan of Vakhtang Gogokhii to extract crypto-currency from the depths of the Internet is familiar to all producers with a large demand for electricity – one must keep close to the source of cheap electricity.
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That’s why Gogokhia, who heads a start-up called Golden Fleece, supplied a cargo container with Chinese computers in Georgia, in a ramshackle building of a former Soviet tractor factory, about 100 km east of the Black Sea coast. The fact is that there is a source of cheap electricity – water flowing down the slopes of the Main Caucasian Range. He also plans to supply solar panels and wind turbines.
Prices for crypto-currencies have been growing until recently, and the industry has started to look towards renewable energy in search of opportunities for increasing computing power. Although traditional fuels (for example, coal) still prevail in utilities, large mining companies, including Bitmain Technologies Ltd., HIVE Blockchain Technologies Ltd. and Bitfury Group have their farms in Canada, Iceland and Paraguay, and, using “green” energy, attract conscious investors additional bait in the form of a relatively low “carbon footprint”.
Gogokhiya is 28 years old, he used to work for the state energy company. He says:
Christian Catalini, who founded the Laboratory of Cryptoeconomics at the American Massachusetts Institute of Technology, says:
This mobility of the miners inspired the Austrian Hydrominer GmbH and the Swiss Envion AG to create mobile data centers mounted in standard cargo containers.
At the same time, computers serving the Bitcoin network consume in total 30 power nuclear power plants, and the industry as a whole is more than all electric vehicles in the world. Perhaps in the future, mining technologies will become more efficient, but today energy costs remain a key problem for miners – especially now that bitcoin is steadily becoming cheaper. By midday Tuesday, February 6, bitcoin hardly returned above $ 6500.
In addition to, there are other problems – even where electricity is cheap, old mining farms are under pressure from both investors and regulators.
In China, the world’s largest producer of mining systems, many farms receive energy from “dirty” coal-fired power plants, while the government has legislatively restricted harmful emissions to the atmosphere and is considering introducing new taxes designed to control the domestic electricity market and operations with crypto-currencies. It should be understood that about 70% of the main mining bitcoins are based in China or belong to Chinese companies.
Now, in connection with the prospect of new restrictions, investors are looking for new places. In Georgia, where approximately three quarters of electricity comes from hydroelectric power plants, Golden Fleece will pay $ 50 megawatt-hour, which is well below the world average of $ 121. Energy in Iceland and Switzerland is even cheaper, while in Canada and Paraguay it is about half the average for the world.
Guy Lane, director of the non-profit Australian Long Future Foundation, advocating ideas for protecting the planet and studying the impact of crypto-currencies on the environment, says: “In such places, green mining is possible and economically feasible.”
The fashion for “clean” energy in the industry coincides with the general– today as technology improves and costs are reduced, electricity from renewable sources begins to be offered in utility networks around the world. In the US, such sources, including wind and sun, account for 17% of electricity consumed – this is twice as much as 10 years ago, and against this background demand for coal is declining.
According to the estimates of BNEF, $ 10 will come from renewable energy sources from $ 10 in new energy projects until 2040. In addition, start-ups around the world are trying to enable private owners of solar and wind power stations to sell electricity directly to other consumers.
In the Paraguayan municipality of Ciudad del Este, located in the Paraná River Basin, near South Brazil, there is a free trade zone, and it was chosen by the miners. It has a 14-gigawatt Itaipu hydroelectric power station with the world’s second dam, and it produces more electricity than Paraguay can consume – as a consequence, prices are about four times lower than in neighboring Brazil.
Brazilian Miner Rochelo Lopez says: “The miners are looking for places where a high margin is possible”.According to him, his farm for 6 thousand computers in Ciudad del Este – the largest crypto-currency enterprise in South America. And this is a very volatile market, where you can lose everything literally overnight.
According to Harry Pocrandt, general director of Canada’s HIVE Blockchain Technologies, in Canada, the energy companies Hydro Quebec and BC Hydro are trying to attract miners. But, he said, cheap electricity is not the only consideration, fast and reliable Internet, as well as the legal framework is also important. In addition, the cool climate allows less to spend on cooling computers.
The Georgian Golden Fleece is trying to collect $ 40 million during the ICO – investors are promised apayment in the crypto currency. The collected money will be used to build servers for the mining of the popular crypto currency, Etherium, which since September of last year has risen from $ 230 to $ 1125. And this is not the only such initiative in Georgia – recently the country’s richest man, former Prime Minister Bidzina Ivanishvili, helped BitFury create a miner’s center worth more than $ 100 million in the Tbilisi free trade zone.
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