Scientists from Cornell University in the US, who conducted the research, said setting up mining operations could reduce the environmental impact of cryptocurrency, while also providing revenue that could be reinvested in future renewable energy projects.
“Profitability of a mining system hinges on periods of steady energy availability since renewable energy sources can vary significantly,” said Fengqi You, a professor of energy systems at Cornell University.
“Therefore, it is important to site the mining farm strategically to maximise productivity.”
The state with the most potential for setting up profitable crypto mining operations is Texas, according to the study, with 32 planned renewable projects capable of generating combined profits of $47 million.
California, Colorado, Illinois, Iowa, Nevada and Virginia all showed potential, though setting up mining rigs presents a large initial cost.
One way of incentivising such projects, Cornell doctoral student Apoorv Lal suggested, could be the introduction of new policies that provide economic rewards for mining bitcoin and other cryptocurrencies with clean energy
”These rewards can act as an incentive for miners to adopt clean energy sources, which can lead to combined positive effects on climate change mitigation, improved renewable power capacity, and additional profits during pre-commercial operation of wind and solar farms,” Mr Lal said.
“We also recommend policies that encourage cryptocurrency-mining operations to return some of their profits back into infrastructure development. This would help create a self-sustaining cycle for renewable energy expansion.”
Bitcoin has drawn criticism from environmentalists for the vast amounts of electricity required to support its network and mint new units of the cryptocurrency, with recent analysis from the University of Cambridge estimating that it uses roughly the same amount of electricity as Poland.
The plummeting costs of renewable energy mean bitcoin miners are increasingly turning to solar, wind and hydro sources to power their operations.
“In its current status, the infrastructure that supports the Bitcoin protocol cannot be sustained, but the beauty of the protocol is that the incentive structure will force miners to adopt the cheapest form of electricity, which in the near future will be renewable energy,” Don Wyper, COO of DigitalMint, told The Independent last year.
The latest study, titled ‘From mining to mitigation: how bitcoin can support renewable energy development and climate action’, was published in the journal ACS Sustainable Chemistry & Engineering.