When most people think of cryptocurrency, they often don't think of the environment. Instead, for many, the digital currency seems to dwell solely in the intangible world. Unfortunately, the new currency is creating a hefty carbon footprint. “Mining” the cryptocurrency is the process of tracking digital coin transactions while releasing new crypto coins. There are no pick axes in these mines, but powerful computers processing online transactions. It sounds harmless because it’s done digitally, but the countless of machines stacked in warehouses are causing a significant drain on energy resources.
The process of mining for virtual coins is estimated to cost $150,000 of electricity a day. Others suggest that the electricity needed for mining the coins is roughly the same amount of energy required to power a county like Croatia. Most of the mining takes place in large facilities full of computers in China where local mines are responsible for about 70 percent of cryptocurrency activity.
While the process of recording thousands of transactions with machines requires a lot of energy, the profits made by mining the coins are just as huge. As more warehouses are created to house these high energy machines, concerns are being raised about the environmental impact. Hydrominer is working to make crypto mining significantly more eco-friendly. The company harnesses green energy from hydropower, which is considered to be an effective renewable energy resource.
Sisters Nadine and Nicole Damblon founded Hydrominer in Austria after becoming acquainted with cryptocurrency a few years ago. The women work together as CEO and CFO and have grown the company considerably since they started mining cryptocurrency in their apartment during 2014. Today, the company operates out of two hydropower stations in the European Alps and aims to have the lowest carbon footprint within the industry.
While hydropower is a promising approach to mining, green cryptocurrency mining isn’t a totally new idea. Some companies have attempted to offset the immense energy requirements for mining through the use of solar energy. Still, there are several advantages to using hydropower. Harnessing water for energy is carbon neutral and a natural source of energy. Using power this way is sustainable, relatively simple, and has a reliable track record.
Hydropower is also very practical because it allows the company to use the water to cool down the mining equipment, which effectively reduces their need to use more energy. Since the company is able to keep everything cool, they can utilize shipping containers and have high density mining on their sites.
From a business perspective, using hydropower makes sense because it is significantly cheaper. In fact, Hydrominer is able to keep their costs of electricity 85 percent lower than the European average because they use this method. One drawback with working alongside a natural resource is that there can be seasonal water level fluctuations. To combat this natural occurrence, the company rents hydro power stations that have relatively stable water levels.
The horizon looks promising for this young company as it recently received significant attention through its successful initial coin offering or ICO. The team hopes to expand to more hydro power stations and continue mining cryptocurrency in an environmentally responsible way as the industry is projected to continue growing over the next few years.