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Energy Use in Crypto Currency Mining: Report to Swedish Energy Agency from RISE in the assignment "Concultancy service about energy use in crypto currency mining"
RISE Research Institutes of Sweden, Digital Systems, Data Science.ORCID iD: 0000-0002-3684-8332
2023 (English)Report (Other academic)
Abstract [en]

This report contains a special assessment regarding the energy use for the crypto currency mining in Sweden, as well as its impact on the energy system. Emerging technologies such as blockchain has received attention due to its growth of demand for infrastructure and energy use. Blockchain offers a new way to conduct and record transactions. It is called crypto currency and is a form digital currency. The drawback is that some crypto currencies currently require a considerable amount of electricity for proof-of-work processing of asset generation, ownership, and exchange. Recently one crypto currency Ethereum has changed to proof-of-stake consensus mechanism causing the energy use to drop drastically. The report will cover crypto currency mining infrastructures. A data center for crypto currency mining is a facility containing graphics processing units GPU-servers in cabinets or ASIC mining rigs on shelfs and equipment supporting the mining operations, for example cooling equipment. The proof-of-work consensus algorithms, that are currently used for Bitcoin, and other blockchains, require a computational-intensive process, solving a math problem. To assess the energy use, a few methods are available. In the short-time frame of this study, RISE relies on already available reports, interviews and some statistics received. In the long run a governmental policy-based requirement on reporting from the crypto mining operators will ensure transparency and quality of the assessment. For Sweden the share of the global Bitcoin energy use is at around 1% according to the Cambridge University data. Nodepole estimates that cryptocurrency facilities in Sweden have approximately 200 MW of installed power. RISE assesses that the data from Cambridge University and Nodepole are reliable and the energy use for crypto currency mining infrastructure has been approximately flat since 2021 until the end of 2022. The level of annual energy use in Sweden is then between 1-1,5 TWh per year and probably closer to 1,5 TWh. Due to new tax regulations, high energy prices, economic downturn and crypto currency drop in value as well as a move towards proof-of-stake methods are ongoing, the annual energy use is expected go down below 1 TWh by year 2025. Bitcoin was born in 2008 when Satoshi Nakamoto published a paper which combined several technologies into a distributed secure digital cash system. Crypto currencies can be used for payments, investments, speculations or as a store of wealth. International legislation and policy making have successfully addressed the environmental impact of crypto currencies. The coming updated legislation, EU Energy efficiency directive, will likely require the actors to report environmental and climate impact information. With a stable and high workload level on the crypto mining data centers and the possibility to plan maintenance stops, these kind of data centers are suitable for interaction to both the power and thermal grids. The crypto mining data centers can be used both for stabilizing the frequency in the grid and to upgrade the stable excess heat. In 2015 another crypto currency called Ethereum launched a concept called smart contracts. It can be used in applications for decentralized secure databases of transactions other than currency. Web 3.0 is a development of the concept where individuals would be allowed to maintain ownership of their own data. Other consensus mechanisms are in development that could help reduce energy use while also addressing scalability and latency issues.

Place, publisher, year, edition, pages
2023. , p. 32
Series
RISE Rapport ; 2023:35
National Category
Engineering and Technology
Identifiers
URN: urn:nbn:se:ri:diva-64208ISBN: 978-91-89757-81-3 (electronic)OAI: oai:DiVA.org:ri-64208DiVA, id: diva2:1742188
Available from: 2023-03-08 Created: 2023-03-08 Last updated: 2023-06-08Bibliographically approved

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Minde, Tor Björn

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