Crypto became far less polluting in 2022 after Ethereum, the second largest blockchain,. That puts the spotlight on Bitcoin, which is estimated to have emitted 86.3 million tons of carbon in 2022.
Nuclear power can help. Cumulus Data has completed a data center connected to the Susquehanna nuclear power plant in Pennsylvania, with plans to house the space for bitcoin mining company TeraWulf. This means that all bitcoins mined through the center emit next to no carbon.
Bitcoin mining requires enormous amounts of energy. Computers around the world attempt to solve intricate cryptographic puzzles, with new bitcoins being rewarded for the first to do so. The more computing power you have at your disposal, the better your chances of solving the problem first. To be competitive, bitcoin miners set up warehouses filled with computing equipment dedicated to the process, consuming vast amounts of electricity.
Because renewable energy sources tend to be cheaper, bitcoin miners often set up their operations near solar, wind, or hydroelectric farms. It is estimated that over 55% of bitcoin is mined using renewable energy, a point crypto advocates often make to argue that bitcoin is actually good for the environment due to its promotion of renewable energy. But Bitcoin’s emissions remain gargantuan, and nuclear power is increasingly being viewed as a way to reduce them.
Cumulus Data’s arrangement is one of many. Oklo Inc is an energy startup planning to build a small nuclear power plant; It has signed a 20-year deal with bitcoin mining company Compass Mining. Miami’s pro-crypto mayor has attempted to lure Bitcoin miners from China by offering the city’s abundant nuclear power.
The system by which bitcoin is mined via computers competing to solve a puzzle is called “proof of work”. Its purpose is to make Bitcoin unhackable: you would need to control over 51% of the computing power on Bitcoin’s network to overwhelm the system. Last year, Ethereum switched from Proof of Work to a system called “Proof of Stake,” where people deposit Ether into the network to be selected to “verify” transactions, for which they are rewarded with Ether tokens.
Essentially, Proof of Work means people use electricity to earn Bitcoin, Proof of Stake lets people put money into the system. As a result of the switch, Ethereum’s carbon footprint has shrunk by over 99%. There is no significant proposal for Bitcoin to make the same switch.