Two US technology companies, Block and Blockstream, are preparing to launch a fully solar-powered Bitcoin creation centre, or mine, in June, in an effort to make cryptocurrencies less expensive and more environmentally friendly.
The digital payments group Block, formerly called Square, and blockchain specialist Blockstream have each invested $6 million in the pilot project which should initially produce about 0.1 Bitcoin a day, Blockstream chief executive Adam Back said, AFP reported.
Blockstream announced the centre would be located in West Texas and equipped with Tesla solar panels and batteries. “A lot of people have talked about the theory, and we thought we would try it in practice, so that we have actual data that people can look at and quote and cite,” Back said.
More than simply creating Bitcoins, “the goal is to prove that ‘mining’ can help finance infrastructure” for renewable energy, he said. The logic, according to Mr Back, is that the Bitcoin creation centre can only use excess capacity from facilities that generate renewable energy, with the bulk of the electricity going to home and business consumption.
Mining Bitcoin requires a series of complex computer calculations, requiring an ever-increasing amount of electricity. Back said the two project partners are thinking of increasing the size of the project by up to 100 times on the same site if the test proves conclusive.
It is not the first cryptocurrency project to rely entirely on renewable energy. In El Salvador, where Bitcoin is an official currency, mining takes place at a geothermal power plant using the energy from surrounding volcanoes.
Criticised for its huge consumption of electricity, the cryptocurrency sector has hosted the birth of several initiatives in recent years to achieve a more ecology-friendly model. Last year, dozens of companies united as the Crypto Climate Accord and pledged to achieve carbon neutrality by 2030.
