- Limited power, infrastructure, and logistical issues have made cryptocurrency mining inefficient.
- Saber56 is a cryptocurrency mining consultancy working to address gaps in the sector.
- This article is part of Master Your Crypto, which helps investors improve their crypto skills and knowledge.
Cryptocurrency mining is well known to be energy intensive and more and more crypto miners consume a lot of energy.
Phil Harvey, CEO of consulting firm Saber56 and a former Special Forces officer, told Insider that due to the limited capacity of the national power grid, "all the fruits of low energy dependence have been harvested."
Additionally, there are currently no guidelines for how organizations should effectively set up and deploy cryptocurrency mining, and according to Harvey, “there are a lot of costly mistakes being made. Companies like Saber56 aim to help crypto miners avoid mistakes and make the right choices in terms of infrastructure and planning.
According to the Cambridge Bitcoin Electricity Consumption Index, Bitcoin, the world's largest, will consume 105 terawatt hours (TWh) of electricity by 2021. Coins flood the market.
While many cryptomining investors have access to capital, Harvey says millions of dollars are often spent buying hardware without considering the underlying infrastructure issues.
Addressing heat and climate risks, local government regulations, and dealing with utility providers are all infrastructure challenges that can delay mining start dates.
“If the cars don't start on the day they arrive, the investors and the companies they buy from will suffer losses. I know there are hundreds of thousands of cars in storage that don't add value,” Harvey said. Company Man surveys the site and works with local utilities to ensure they can provide power to the mine.
Converting a hydroelectric plant in Paraguay to crypto energy
Starting with such ambitions, but with little knowledge of the practicalities of mining, is the ongoing Itaipu Dam project on the Paraguay-Brazil border, which aims to turn excess energy into a resource for cryptocurrency mining.
Since 2020, the low cost of electricity in Paraguay has prompted local and foreign companies to increase their investment in the country's cryptocurrency mining infrastructure. In July of this year, the Paraguayan Senate officially recognized cryptocurrency mining as an industrial activity, seeing the creation of jobs. and increased trade in South America.
This is Michael Blank, an independent consultant to the Paraguayan government who worked with Saber56 on the project. "We want to apply this process to develop a digital asset mining industry without deep industry knowledge."
Citing government regulations such as minimum labor requirements, implementation of certain technological solutions and ESG issues, the group faces several challenges. "The industry landscape, or lack thereof, is inherently complex," Blank said.
Working with Blank and his team, Saber56 surveyed the site and recommended intensive mining, taking into account how the project would integrate with the surrounding urban and rural infrastructure and the availability of technology, labor and energy in the area. The equipment is best controlled by the government. At the time of writing, the project is in the middle of a race for cryptocurrency miners to control the dam.
Creating successful cryptocurrency mining
Saber56 has recommended projects as diverse as converting excess energy from nuclear projects in Abu Dhabi to sustainable generation at hydroelectric plants in Norway and Canada. Harvey's group is helping to supply about 400 megawatts of electricity to the cryptocurrency mining sector, which is equivalent to the power of 800 50-story buildings.
Although the goal of developing each mining facility is the same. Each project faces its own challenges in using excessive energy to power the computers that form the basis of a cryptocurrency blockchain.
"The parties that come together are very different, or the government regulations are different, or you have certain aspects of the design, like heat, climate, schedule, budget and ongoing drama around the world that support the project," he said.
Saber56 uses military superiority to control these competing forces; About half of the advisers are former operatives of the British special forces. "We learned that no program can protect against the enemy," he said. In mining, it's anything that threatens to slow down enemy equipment.
Carefully planned projects like the Itaipu Dam will rid crypto mining of its "Wild West" reputation and will be critical to creating a long-term, scalable and sustainable sector, Harvey said.
"If there was an industry that would push the sustainability agenda or the transition from carbon to renewables, it would be the blockchain industry," Harvey said of the industry, which currently emits about 65 megatons of carbon dioxide. atmosphere every year.
This article is intended to provide general information for the education of the general public; It does not provide personal, legal or business investment or other professional advice. You should always consult a financial, legal, tax, investment or other professional regarding matters relating to you and/or your business before taking any action.