Square, in collaboration with ARK Invest, has published a whitepaper to show how the mining of bitcoin could accelerate the energy transition to renewables.
Hate reading? Here’s the nutshell version:
— Square Crypto (@sqcrypto) April 21, 2021
The paper was written by the so-called Bitcoin Clean Energy Initiative, and is intended to be a common starting point for sharing a new vision within which bitcoin mining, in combination with renewable energy and energy storage, could be particularly suited to accelerate the ongoing energy transition.
ARK Invest has produced a model that shows how bitcoin mining could actually help increase the use of renewables and energy storage, as well as promote the development of a new grid and lower electricity costs.
According to Square, solar and wind power produce cheaper energy than fossil fuels, which should make these renewable energy sources ubiquitous.
However, their deployment is hampered by an obvious limitation, namely that they produce energy not when they are needed, but often when demand is low. Batteries could solve this problem, but they are not cheap enough.
Square’s bitcoin mining project
In order to overcome this limitation, a new ecosystem would have to be built in which solar, wind, batteries and bitcoin mining coexist to form “a green grid” based almost exclusively on renewable energy.
According to the paper produced by the Bitcoin Clean Energy Initiative, this would be feasible without jeopardizing the viability of the industry.
Furthermore, it is speculated that the bitcoin and energy markets are converging, with energy asset owners likely to become miners in the future.
The paper states:
“Utility executives, sustainable infrastructure funds, and grid-scale storage developers are well-positioned to expedite this future by aligning their strategic roadmap and deploying large scale investments into the emerging synergy between bitcoin mining and clean energy production”.
In other words, bitcoin mining could play a concrete role in facilitating the rapid development of a new energy infrastructure capable of storing energy produced from renewable sources, and then distributing it when demand increases. This is a large-scale project, which in theory could revolutionize energy production and consumption, favouring the use of renewable sources over polluting ones.