Crypto Miners Are Heading North to Utilize the Arctic Cold
As crypto’s energy use becomes a problem, miners are heading to the Arctic to utilize the cold and the region’s renewable energy grid.
June 7 2021, Published 3:28 p.m. ET
It isn't a secret that Bitcoin and crypto mining are having a negative impact on the environment. The enormous amount of energy needed to solve the complex problems to mine new tokens means even more reliance on electricity generation. Ark Investment analysts say that about 76 percent of crypto mining uses renewable energy, while the remaining segment is done using coal-powered electricity. This has led Arctic countries to become a hotbed for crypto miners.
Miners are using geography to cool their data centers.
One of the main problems with crypto mining is the space needed to store all of that data. As with any data center, huge server rooms generate a lot of heat. If these computers overheat, it could damage them and jeopardize the information they hold.
Keeping these centers cool with traditional air conditioning requires immense amounts of electricity, so crypto mining companies are moving north. By utilizing the naturally cold temperatures, the companies' reliance on electricity to cool their server rooms becomes obsolete.
Arctic countries have invested in affordable renewable energy infrastructures.
Countries like Norway and Iceland have been pioneers in implementing renewable energy into their grids. Iceland generates 100 percent of its energy through renewable sources like hydroelectricity and geothermal. Norway gets nearly 97 percent of its energy from hydroelectricity.
Iceland was the first country to commit to a fully renewable energy grid back in 1998. Norway has had a robust hydro infrastructure since 2005. Because of the established renewable energy grid, electricity is relatively cheap compared to other countries.
This has led many crypto miners to set up shop in Iceland, Norway, and other Arctic countries. What miners can’t harness from the bitter cold, they can tap into the affordable renewable energy grid.
Russia’s Arctic region has attracted crypto miners as well.
The Siberian town of Norilsk is the home of Russian mining company BitCluster. In late 2020, BitCluster took over an abandoned nickel mining facility to build its crypto mining farm. Norilsk is a substantial source of mining precious metals like nickel, copper, and platinum.
While Norilsk’s energy grid isn’t entirely renewable, it uses natural gas and hydro to generate its electricity. However, BitCluster won’t have to tap into the energy as much due to the extreme location and bitter temperatures. The average temperatures for Norilsk stay below freezing eight months out the year.
According to Bitcluster’s webpage, the company uses a unique canopy to protect the facility from the cold. “The warm air from the miners is mixed to prevent the snow from falling,” Bitcluster details. Also, Bitcluster says that its mining rigs are stored in various containers in the region that are usually covered in permafrost.
As Bitcoin and other altcoins become more popular and the demand increases, an emphasis will be placed on mining operations to mitigate energy concerns. As miners move north, undoubtedly, large investments will follow, which will bring additional development to the region.