The war in Ukraine and the high cost of electricity have turned Bitcoin farms into not only intensely polluting but also very costly operations, with the only solution to continuing operations being to find the cheapest and “greenest” sources of energy possible.
Much to the exasperation of the video card manufacturers (e.g. Nvidia and AMD), the Ethereum network migrated towards the end of 2022 to a proof-of-stake model of operation, which reduces 99% of the carbon emissions associated with processing transactions in this cryptocurrency. By contrast, captive to the same proof-of-work technology under which it debuted more than 10 years ago, Bitcoin cannot reduce its huge energy consumption, leaving it with the label of the most environmentally unfriendly option for cryptocurrency transactions. Thus, in 2022 alone, Bitcoin is estimated to emit 86.3 million tonnes of CO2.
While nuclear power could improve the CO2 footprint, the prospect of “hijacking” an entire nuclear power plant that could have served other purposes is not exactly encouraging. Specifically, instead of CO2 emissions we could be talking about nuclear waste, which will have to be managed and stored for the long term.
In this case, the collaboration brokered by US company Cumulus Data, between cryptocurrency firm Compass Mining and an energy startup called Oklo, involves building a mini-nuclear power plant right next to such a mining centre. The project is even backed with a 20-year contract signed with Compass Mining, the plan being to attract other partners recently “unplugged” from China’s cheap energy sources, generated mostly through intensely polluting methods such as coal-fired power plants.
It is not yet clear whether the Bitcoin mining project using nuclear power is just an experiment to prove the viability of the concept, or a trend that will be followed by other cryptocurrency giants.