The move into sustainability: the next generation of cryptocurrency mining
A new Melbourne-based company is aiming to put a greener, more constructive spin on cryptocurrency.
Blockchain company EcoGen Technologies, officially launched in June, is developing containerised power hubs that use the latest renewable energy technology.
The company aims to place the off-grid transportable hubs in remote areas of developing countries such as the Philippines, Sri Lanka and Zimbabwe. These hubs mine cryptocurrency and harvest surplus energy to create passive income and convert it into fiat currency.
One of the five directors of EcoGen Technologies, John Domantay, says many of EcoGen’s founders are first-generation Australians.
“They have experienced first-hand inconsistent access to electricity,” he says.
EcoGen Technologies’ directors. Picture supplied.
The company’s energy-generating pods can be quickly deployed, he says, and are useful in circumstances where the grid is down or there is no reliable source of electricity.
Currently, physical cryptocurrency mining is exceptionally energy-intensive, and it is the method used by the leading cryptocurrency, Bitcoin. It requires expensive equipment and an enormous amount of energy.
Mining cryptocurrency usually refers to the Proof of Work consensus mechanism, where miners solve complicated mathematical puzzles that require extensive computational power, which in turn require large amounts of energy.
“EcoGen is different from other blockchain companies in that we are combining the power of blockchain with another large real-world problem, which is the generation of clean energy that is off-grid,” Domantay says.
No other sustainable crypto farms give remote communities access to the basic need for electricity and power to live comfortably.
One of the power rigs. Picture supplied.
Digoconomist, a cryptocurrency analytics webpage, reports that a single bitcoin transaction equals 2220.2 kilowatt hours (kWh) of electricity. This is about the same amount of power used in an American household over 76 days.
The European Environment Agency details a host environmental problems related to energy production and consumption, including air and water pollution, climate change and more.
Alternatively, corporations can go digital.
Maryna Kovalenko, co-founder of crypto and blockchain tax compliance firm Syla, says one alternative is to mine Ethereum, the second-most widely used cryptocurrency.
“Mining Ethereum would be like staking rent alternative and not requiring any powerful equipment,” Kovalenko says. Digital currency news site CoinDesk describes staking as the crypto equivalent of putting money in a high-yield savings account – where the currency is lent out and a small return is paid to the owner.
“So, it is kind of light and nice, and you can argue that no electricity is wasted.”
The crowd at the launch for EcoGen Technologies. Picture supplied.
However, Kovalenko says physical miners are here to stay. “They are not going away [and] will do whatever it takes to stay in business,” she says.
Shark Tank entrepreneur Kevin O’Leary said in a CoinDesk Consensus 2021 Conference that leading corporations are reluctant to add cryptocurrency to their balance sheets because of the environmental, social and corporate governance issues.
He said that for corporations to acknowledge cryptocurrency as an asset, miners must prove they are sustainable, suggesting that greener practices will drive up asset prices and demand.
O’Leary is interested in “tagging,” or wrapping bitcoin – a way to eliminate risks from theft or loss – that has been mined sustainably.
However, Kovalenko says the crypto industry may not be so open to change.
“I am not 100 per cent supportive of this because I prefer to know that the coin is one asset rather than split into different versions. .. it creates more complexity in our society and cuts the purpose, creating an underbelly to Bitcoin,” says Kovalenko.
Nonetheless, she says it is impossible to keep everyone happy in the cryptocurrency and blockchain industry.
“It is the reason why we have so many chains. We have had Bitcoin cash, coin, gold, and all of these splits, which are happening because people disagree.”
It is tough to satisfy everyone in cryptocurrency. It is just not going to happen.
Regardless, the big mission in the crypto world is to find a sustainable solution to mining. Unusually, EgoGen Technologies limited the amount of investment each person could make in the company, giving each founder an equal vote.
Investors can mine in crypto without the guilt of pollution and dirty energy sources while developing countries gain access to the electricity that will help light up their homes and the power to use their appliances.
They hope will it will attract the crypto-curious and socially conscious investors with its win-win approach.