The power of the atom will be harnessed to mine cryptocurrencies in a rather short time: in the United States, more precisely in Ohio and Pennsylvania.
"Perry Nuclear Power Plant, Unit 1" by NRCgov is licensed with CC BY-NC-ND 2.0. To view a copy of this license, visit https://creativecommons.org/licenses/by-nc-nd/2.0/
The case of Pennsylvania concerns the nuclear power plant known as the Susquehanna Steam Electric Station: one of the owners of the plant, the US company Talen Energy, wants to build the data centre dedicated to mining. In the case of Ohio, however, the energy supplier is Energy Harbor Corp, while the miner is Standard Power. The aim is to repurpose an abandoned paper mill for mining.
Elon Musk has said it himself: the problem with bitcoin and certain other cryptocurrencies is that mining them requires a lot of electricity, which if not produced cleanly can have a significant environmental impact. And that is why its Tesla no longer accepts bitcoin payments for its cars (or at least that is the official reason...).
In the idea of the project proponents, nuclear power plants are a potential solution to this problem: the energy produced with this technology has relatively low costs, and "CO2 emissions are zero" (on this last statement we totally disagree because the plants have to be powered by the uranium that is mined and the mining industry is extremely energy intensive! For more on the environmental issue you can refer to this). The problem is the catastrophic consequences on a global scale in case of failures and accidents, as Chernobyl in 1986 and Fukushima in 2011 taught us. However, it is worth pointing out that the power plants are already up and running, they are not being built specifically for mining.
The Pennsylvania data centre will consume up to 300 MW when fully operational, with the potential to reach GW in the future if needed. The plant consists of two reactors of over 1 GW each. The plant will not only be dedicated to mining: it will also be a hyperscale computing environment, a data centre capable of reaching extremely large sizes. Permits have already been obtained, and work has begun: the facility is expected to start operating in less than a year, in the second quarter of 2022.
We have brought you this news to help you understand the movements that are taking place in the crypto mining industry, huge investments that can only be recouped with a rise in prices.
The BTC mining industry
Let us take a moment to analyse the economic dynamics governing the BTC mining industry. Historically, for as long as bitcoin has existed, miners have on average spent more coins than they have accumulated. This has been a constant throughout the bitcoin industry. In fact, the gains miners make in their business are not secured by the ability to accumulate bitcoin, but by the continuous increase in bitcoin's prices over the long term (despite the high volatility).
We know that bitcoin, in its historical cycles, never returns to the lows of the previous cycle and ensures an almost perfect rise in price over the long term, even though within a single cycle its volatility is enormous. This is what ensures that miners are always profitable in the long run.
If bitcoin didn't have this extraordinary predictability in pricing, the mining industry, forced as it is to spend more BTC than it produces, would be long gone.
| Date | Closing |
|---|---|
| 13/07/2021 | $ 32,702.03 |
| 13/07/2020 | $ 9,243.61 |
| 13/07/2019 | $ 11,392.38 |
| 13/07/2018 | $ 6,238.05 |
| 13/07/2017 | $ 2,357.90 |
When you meet someone who still argues that bitcoin is dangerous as an investment asset, you might want to highlight this key economic fact!
Conclusions
The news is to be welcomed and is to be considered a strong bullish signal for the medium to long term. The large investments can only be repaid with a continuous increase in the market price of BTC, also due to the continuous increase in the difficulty of creating blocks. The fact that the investment is then supported by economic operators and financial operators, who are certainly better informed, suggests that their prospects are undoubtedly towards a strong rise in prices (and in the end, many new whales are precisely financial operators who have entered the last cycle).
Sources
https://www.tomshardware.com/news/talen-energy-plans-nuclear-powered-crypto-mine
https://cryptoslate.com/clean-bitcoin-btc-mining-is-coming-via-this-ohio-nuclear-plant/
https://www.theblockcrypto.com/linked/111195/nuclear-bitcoin-mining-operations-ohio-december-2021
DISCLAIMER
We are not giving any financial advice regarding cryptocurrencies, but rather giving applicable advice for new, intermediate and experienced people who are currently into cryptocurrencies or someone who is just now realizing what it is. Before you read this I must say that this blog will be based on the assumption that you have already done some research on cryptocurrencies and the Blockchain ecosystem. We will continue to provide explanations and details to the best of our ability, however we encourage you to do your OWN research because only YOU will know how this second financial revolution will best fit into your life. That said, I hope you are as excited as we are and thank you for reading our contents.