The transition towards an environmental sustainability for Cryptocurrency mining

Abstract

As Cryptocurrency becomes more and more popular so does its demand for mining rigs. At the end of 2020 there were approximately 5,392 different cryptocurrencies available with a total market capitalization of more than $201bn [1]. Cryptocurrencies are using decentralized, distributed systems in order to operate. The mining process involves solving cryptographic equations, which are ultimately used for ensuring encryption of the blockchain transactions, through the use of IT equipment - the most efficient way of doing it being by building mining farms which use Graphics Processing Units (GPUs). The Crypto farmers are rewarded with a share of the transaction they facilitate. As the Cryptocurrency market grows exponentially every year, so does its hunger for energy. For example, the Bitcoin Energy Consumption Index is evaluated to reach 77.782 TWh/year in 2021 [2], which, for comparison, is approximately 1.5 times larger than the entire electricity consumption of Romania in 2020 [3]. In this paper, the transition of Cryptocurrency mining processes towards environmental sustainability will be analysed. A Crypto-farm’s Energy Performance Indicators (EPI) and Power Quality Indices (PQI) will be evaluated and, with the use of dedicated software solutions, the authors will propose an action plan to minimize the environmental impact of the energy boundary and to maximize the EPI, thus maximizing the profitability of this new type of business.