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Is Bitcoin A Long-Term Investment? Inside A Mine In Norway That Also Dries Wood


Is Bitcoin A Long-Term Investment? Inside A Mine In Norway That Also Dries Wood

A 5,000 square metre warehouse on the outskirts of Hnefoss, a little town 40 miles west of Oslo, is home to Norway’s largest bitcoin mining facility, a line of gigantic blue skips loaded with chopped wood.

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The Company Had To Spend £1.5 Million On Soundproofing

Flexible corrugated pipes flowing out from the warehouse are used to pump hot air into the 12 skips. Despite the snow, it will take several days for the logs to dry out, after which a local lumberjack, thankful for the free service, will haul them off to the market. The wood is being warmed by a little amount of the so-called waste heat released by the warehouse’s thousands of stacked-high laptop servers, also known as miners. It is one of two such websites owned by Kryptovault, a Norwegian company. By the end of this year, the company wants its mining to account for slightly under 1% of the compute and course of energy in the global bitcoin ecosystem.

Bitcoin mining, which involves solving complex computational arithmetic puzzles and confirming transactions in order to earn money, is notoriously energy-intensive. According to the most recent figure from Cambridge University’s bitcoin electricity consumption index, the sector consumes more energy in a year than numerous countries, including Argentina, Pakistan, and Poland. Heat is an unavoidable consequence of the manufacturing process. Despite the fact that noise from air flow followers is so loud that the company had to spend £1.5 million on soundproofing after complaints from neighbours, the Hnefoss warehouse can reach temperatures of 55 degrees.

For many, at a time when energy costs are skyrocketing, this may be more confirmation of the unsustainable nature of a business that Robert McCauley, a senior scholar at Boston University’s international growth coverage centre, recently called as worse than a Madoff-style Ponzi scam. In fact, the critics are circling. Russia’s central bank has urged that all cryptocurrency operations be banned in the country, and China has already done so. In Europe, Swedish regulators have referred to as for one thing. Bjrn Arild Gram, Norway’s regional growth minister, told the Guardian that his government was considering its options.

Although crypto-mining and its underlying technology may have some long-term benefits, it is difficult to justify the widespread usage of renewable energy today, Gram said. The ministry of local government and regional development is presently considering potential policy measures to address the issues posed by crypto-extensive mining’s energy demand. However, there is a fightback emerging in the sector, and Kryptovault, which uses only renewable energy, is a part of it. This week, billionaire Michael Novogratz, the founder of Galaxy Digital, a digital property firm aiming to be the Goldman Sachs of crypto, announced the launch of a sustainability programme on energy use and social responsibility, claiming that the company wanted to correct a false narrative around crypto.

Some opponents labelled it greenwashing, but it marked a shift in a world that had previously been less than transparent about its operations, choosing secrecy over sympathy. Kjetil Hove Pettersen, 39, the CEO of Kryptovault, who founded the company with friends after deciding to turn a hobby into a business, stated that he believed it was also time for the industry to challenge the dominant narrative. If you look at the entire energy cost for any given object around the world, it’s always going to be big – I think we can always equate it to a little European country, he said. This includes traditional gold mining, which consumes more than four times the energy that bitcoin mining consumes.

Bitcoin proponents believe that it allows users to instantly exchange value with others without the use of a third party such as a bank, without requiring authorization, and at a low cost. They claim it is being embraced at a faster rate than the internet was in the 1990s, with El Salvador becoming the first country to accept it as legal tender alongside the US dollar, despite reservations from the International Monetary Fund. People wanted bitcoin, according to Pettersen, and mining enterprises provided financial rewards in the form of tax and employment. Mining has also been considered as a way for international places with more renewable energy supply from hydro, wind, or solar energy at specific times and seasons to make use of it within their own borders and without switching costs. The percentage of renewable energy used in mining has been estimated to range from 25% to 57%.

Kryptovault Hopes To Have 15,000 Miners On The Job

Mining is not polluting in and of itself, Pettersen stated. If you’re mining with coal, that’s a different situation, and that’s what you don’t want. Mining should be done in more places than just Norway, and it can help conserve trapped energy. For example, in northern Norway, where there is a surplus, or in El Salvador, where energy from volcanoes is currently being used to start up production where it previously did not exist.

By the autumn, Kryptovault hopes to have 15,000 miners on the job. In appreciation of its exceptional scale, Otto Him, 37, and Martin Mikalsen, 26, who manage the Hnefoss mine, have dubbed one place between two large partitions, or pods, of 6,500 computer systems the cathedral.

Is Bitcoin A Long-Term Investment? Inside A Mine In Norway That Also Dries Wood


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