Investments in renewable energy will skyrocket while cryptocurrencies can make it economically viable

One of the strongest criticisms of cryptocurrencies is the criticism that is related to the environmental pollution caused by the high energy consumption required to mine these currencies. This critique is based on studies showing that the energy consumption of cryptocurrency mining is so high that it can be compared to the energy consumption of entire countries such as Denmark.

Indeed, cryptocurrency transactions consume a lot of electricity because they use complex computational algorithms as a means of complicating transaction verification. In addition, they make fraudulent transactions costly and deter those who want to misuse this currency. This means, however, that because most of the world still relies on coal, gas and oil to generate electricity, ultimately the use of energy-consuming algorithms to guide the cryptocurrency authentication and mining process means that transactions with cryptocurrencies use the burning of fossil fuels, thus destroying the environment.

But is it really so, or is this kind of analysis one-dimensional?

Just two generations ago, people used electricity in their daily activities mainly for lighting, cooking, laundry, television and radio. Today people use electricity for infinitely more activities.

At the heart of the modern economy built from the fourth and now the fifth industrial revolution, the entire digital world we now use in all our activities, with the operation of a huge number of data centres, relies on electricity. As we move into data-driven technologies such as the Internet of Things, as the earth's population grows, and as the standard of living of human beings improves, the demand for electricity will grow, and in the near future will skyrocket.

Today in the business world, everyone around the world is increasingly looking forward to a new digital future for their business. A new digital future which obviously requires a lot of electricity. On the other hand, given the climate crisis, the consequences of which we are all already experiencing, governments are focusing on a more environmentally sustainable future with less electricity production from fossil fuels.

So basically, we have two important issues

• The first is that the demands on energy given the fourth and fifth industrial revolutions will skyrocket.

• The second is that given the environmental crisis, energy production must become green in the next few decades.

Indeed, the planet, in order to maintain its geography and biodiversity, must become independent of fossil fuels. And this must be done as soon as possible. The limits set by scientists for this purpose are the years 2030 and 2050. But at the same time, as already mentioned, in the coming decades' electricity consumption is expected to skyrocket.

In order for humanity to meet the strong demand for electricity and at the same time for the decoupling of its production from fossil fuels, a combination of huge investments in green energy as well as intelligent practices will be required.

Investments planned to generate electricity using renewable energy sources will be huge in the coming decades. However, a crucial issue lies on the question of whether these investments, other than being green, can be financially viable.

The problem of financial viability with the production of clean electricity using renewable sources is that, unlike fossil fuels, green energy is produced not only in the time period decided by man, i.e., in the period of high demand for consumption but also, in the time period decided by nature. For instance, a wind turbine generates electricity, not only during the period of greatest demand for electricity such as during the day but also generates the same electricity late at night, when human and business activity is significantly reduced. This means that in the time period where there is low demand, since the supply of energy by renewables remains stable, surplus electricity cannot be consumed. This raises two serious issues:

• The first issue is that part of the electricity generated by renewables which can be a significant part of it is eventually lost.

• The second issue is that as part of the electricity generated by renewables is lost, investments in renewable energy sources can become economically unsustainable.

One solution to solve the problem would be to store electricity or transport it to places that have a different calendar time. But unfortunately, the cost of storing or transporting electricity is extremely high and therefore this cannot solve the problem.

Another solution is for these investments in order to become sustainable, to be subsidized by governments. This is largely done by governments, but it means that a large part of the funds that would go to new investments eventually support the existing ones.

Another idea is for energy sources to work in combination. That is, the renewable sources to supply the electricity network to the extent that there is always a demand for electricity, while during the hours when the demand for electricity increases, to use fossil fuels to satisfy this demand. But this solution is contrary to the strategy of complete independence from fossil fuels.

More intelligent solutions are needed

In fact, since in the production of electricity from renewable sources, we cannot control the schedule of production of electricity, i.e., supply, we must focus on how we can effectively manage the schedule of electricity demand.

We should basically look for consumers of electricity, who have independence about the time of the calendar day that needs to consume electricity. In other words, it is necessary to find consumers who can consume electricity when there is a surplus of electricity due to low demand. Such consumers are cryptocurrency miners.

In fact, cryptocurrency miners seem to be a very good solution because, on the one hand, they require very large amounts of electricity to calculate their complex algorithms and on the other hand, since miners can be scattered in all geographical parts of the world, they can absorb the excess electricity from all corners of the world at any time of the calendar day that is in the production network. Thus, demand becomes stable, and since the production of electricity from renewable sources is not lost, this can help investments in renewable energy sources become economically viable.

Electricity consumers such as cryptocurrency miners do not just help make renewable electricity sources viable. Given that they can be located in the most remote parts of the earth they can favour the poorer remote areas. This is because, poor areas that have untapped natural resources, such as hydroelectric or geothermal sources can generate renewable electricity that will be consumed also by cryptocurrency miners, and thus can help make these renewable energy resources viable and consequently help to make these poor areas prosperous.

We live in a world where energy becomes the cornerstone of activity for every action we take. On the other hand, we live in a world where the production of energy that leaves no environmental footprint like electricity from renewables is a one-way street. If intelligent solutions are not found to be satisfied the above, sooner or later the world will find itself at a dead end.

In this respect, maybe the next time cryptocurrency critics raise their concerns about the problem of very high-power consumption required by cryptocurrency mining, they should think of the words of American author Zig Ziglar who says that “When you focus on problems, you have more problems. When you focus on the possibilities, you have more opportunities”.

Cryptocurrency may be a possibility for the financial viability of investments in renewable energy sources as well as for global prosperity in every corner of our planet.

After all, when a possibility improves the financial viability of something or someone else, it inevitably improves its own viability by making that possibility an opportunity. And this is something we must always keep in mind, especially in the world of intelligent possibilities that give value to investment and trading opportunities.