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How Did Crypto Save a Hydropower Plant in Costa Rica?

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Emily Newton's picture
Editor-In-Chief, Revolutionized Magazine

Emily Newton is the Editor-in-Chief at Revolutionized Magazine. She enjoys writing articles in the energy industry as well as other industrial sectors.

  • Member since 2020
  • 37 items added with 27,875 views
  • Mar 9, 2022
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Global organizations established net-zero emission goals to reach before 2050. These objectives are affecting different industries’ energy consumption patterns. The cryptocurrency sector is adopting more renewable electricity to shrink its carbon footprint and lower operational costs.

Industrial energy consumers are influencing the clean energy market, especially hydropower production. Bitcoin miners are relying on these plants to support their high energy demands. The sector helped a plant in Costa Rica access government funding during monopoly-related challenges.

Costa Rica’s Energy Distribution Monopoly

About 99% of the country’s power supply comes from renewable sources, and half of that derives from hydropower. During the pandemic, decreased tourism rates and lower residential energy consumption caused a surplus of electricity.

The Costa Rican government called upon hydropower producers to reinvent their production methods. The country also has a monopoly on energy distribution, which influences renewables. Family-owned hydropower companies suffered the most from distribution limitations.

Eduardo Kopper owns a hydro plant in Costa Rica and placed production on hold for months during the pandemic. The country’s government solely purchased renewable power from selective groups. Kopper teamed up with Bitcoin and increased the crypto industry’s access to emission-free energy to increase economic security.

What Is the Relationship Between Crypto Mining and Hydropower?

Hydropower is one of the oldest energy forms. It dates back to 200 B.C. and supported the milling, smith and woodworking industries. Today, tech companies access hydropower to shrink their carbon footprints and lower operational costs.

Crypto miners have a poor environmental reputation. A single Bitcoin transaction uses nearly 1,173 kilowatt-hours (kWh) of electricity. The whole company uses as much energy as small countries like Sweden.

In 2020, most Bitcoin mining took place in China. Over half of the country’s power supply comes from coal, which contributes to climate change. Fossil fuels are also more expensive than clean energy sources, raising the operating costs of crypto mining.

Environmentalists and economic professionals explored the impact of hydropower on the crypto industry. They discovered that specific plants could dedicate 100% of their electricity production to Bitcoin mining. Both industries began working together to minimize economic and environmental challenges.

How Are Bitcoin Miners Working With Hydropower Plants?

Bitcoin swept into Costa Rica as the hydropower industry reached a distribution low. Miners searched for an affordable, low-impact power source, and producers like Kopper were ready to deliver. If the crypto industry continues accessing fossil fuel energy, family-owned hydropower plants could go out of business.

Bitcoin improved the economic stability of many hydropower producers. Researchers evaluate the success of crypto mining in Costa Rica and explore potential relationships between digital currencies and renewables. They now view crypto as a positive influence on clean energy’s infrastructure.

Crypto mining companies could become reliable customers for renewable energy. As digital currencies grow, the demand for clean electricity will follow. Renewable energy producers can capitalize on the industry’s shift by developing advanced manufacturing methods.

The increase in clean energy production influences green technological advancements. In turn, hydropower advancements may support mining practices.

New Hydro Technological Inventions

The hydropower industry can adopt new technologies to create reliable and abundant clean energy supplies. One advancement is the pumped-storage hydropower (PSH) system. The technology works like a conventional battery and holds excess water as potential energy.

PSH systems release water from high elevations during peak consumption hours to stabilize the energy grid. PSH technology minimizes power outages and increases hydropower supplies. 

Another renewable advancement is tidal energy. Like conventional hydropower, tidal energy relies on natural water patterns for emission-free electricity production. Deep-sea turbines capture potential energy from 16-foot tidal differences. Costa Rica can adopt the power production technology because it is a coastal country.

The final technological advancement is wave energy. Wave energy is similar to the tidal alternative because it uses turbines to generate electricity. Instead of relying on tidal shifts, the power source uses natural wave patterns.

What Is Green Crypto?  

Costa Rican hydropower plants that support Bitcoin mining create a green cryptocurrency. Green crypto signifies digital currencies with minimal environmental impacts. 

The first feature of a sustainable currency is its production source. Green cryptocurrencies use renewable energy to support their mining practices. Outside of hydropower, crypto accesses electricity from solar and wind sources. 

Another consideration in green crypto is electronic waste (e-waste). Cryptocurrencies like Bitcoin can minimize e-waste by reducing overheating and increasing a computer’s longevity. They may also reduce digital waste by optimizing data usage. Bitcoin generates carbon emissions for each gigabyte of data it uses.

Crypto companies can shrink their carbon footprints by adopting carbon capturing and storage (CCS) practices. CCS absorbs carbon emissions on-site and transports them to a storage facility. Storage professionals place them beneath Earth’s surface and allow photosynthesis processes to naturally filter the contaminant.

How Can Green Crypto Improve Ecological Conservation?

Producing Bitcoin with renewable energy like hydropower can minimize the environmental impact of currencies. Paper money production harms the environment, specifically through deforestation.

Transitioning away from paper can preserve forests. Protecting vegetated spaces is essential to reducing climate change. A single tree may absorb and filter about 48 pounds of greenhouse gas emissions annually.

Green cryptocurrencies also have a smaller carbon footprint that reduces atmospheric degradation. 

Another ecological benefit of sustainable crypto is renewable energy infrastructure advancements. Many countries established emission reduction goals, and green crypto can fund the transition away from fossil fuels.

Limited funding is holding various countries back from creating large-scale hydropower plants and wind farms. Regions can expand their renewable energy supplies by building reliable consumer relationships. Bitcoin may continue leading hydropower expansions throughout the world and shrinking society’s carbon footprint.

Will Costa Rica Become a Crypto Mining Mecca?

Costa Rica has a supportive topography for hydropower advancements. It also can create off-shore wind farms and tidal energy systems. The crypto mining sector may increase its sustainability by teaming up with regions producing large quantities of renewable energy.

A small island like Costa Rica can only produce so much clean energy, leading crypto companies to search for other high-production areas. The crypto sector is currently moving away from mining practices in China and toward U.S. production. America may need to expand its renewable infrastructure to reduce digital waste and support net-zero emission goals.

 

Discussions
Matt Chester's picture
Matt Chester on Mar 9, 2022

Crypto tends to thrive where the land AND energy is cheap. So where some can be built near land open for solar/wind, hydro is a bit more restrictive and I would imagine that land is more expensive too, right? 

Jim Stack's picture
Jim Stack on Mar 11, 2022

but all of that Energy could be used for homes and people not crypto . QUOTE=Environmentalists and economic professionals explored the impact of hydropower on the crypto industry. They discovered that specific plants could dedicate 100% of their electricity production to Bitcoin mining. Both industries began working together to minimize economic and environmental challenges.

Paul Korzeniowski's picture
Paul Korzeniowski on Apr 11, 2022

Interesting intersection among a variety of new technologies: renewables, hydropower, and cryptocurrency. My understanding is Costa Rica is emerged as an environmental leader, a distinction that has a had a positive impact on its tourism business. It will be interesting to see how the country continues to evolve in the future. 

Emily Newton's picture
Thank Emily for the Post!
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