Square, the digital payments firm led by Twitter CEO Jack Dorsey, is teaming up with blockchain technology provider Blockstream Mining to build an open-source, solar-powered bitcoin mining facility at one of Blockstream’s U.S. sites.
Square will invest $US5 ($6) million in the facility, which will be a “proof-of-concept for a 100% renewable energy Bitcoin mine at scale,” Blockstream announced in a company blog post Saturday. The partnership, which Square confirmed via Twitter on Saturday, is part of Square’s Bitcoin Clean Energy Investment Initiative, an effort it launched in December to support companies working to reduce the bitcoin ecosystem’s massive carbon footprint.
A few bitcoin mining operations have already begun transitioning from fossil fuels to more renewable sources of energy such as solar and hydropower, but Blockstream said it hopes the “open and transparent nature” of this facility will encourage others to follow suit. Its operational costs and return on investments will be made open to the public, and Blockstream will maintain an online dashboard that shows real-time metrics about the facility’s performance, including its power output and bitcoin yield, accessible 24/7 from any internet browser.
“We hope to show that a renewable mining facility in the real world is not only possible but also prove empirically that Bitcoin accelerates the world toward a sustainable future,” states the company’s blog post.
It takes a ton of electricity to power bitcoin mining operations, though scientists have struggled to determine its exact carbon footprint. Some researchers estimate that the carbon footprint of bitcoin mining alone could push us over the critical two-degree Celsius threshold within a few decades. A study published in March in the science journal Joule estimated that by the end of 2021, bitcoin mining could consume nearly as much energy as every data centre in the world combined.
Yet another study from Digiconomist, the researchers behind the widely cited Bitcoin Energy Consumption Index, found that, on average, mining a single bitcoin consumes 1,553 kilowatt-hours of electricity, about what your typical U.S. household would burn through in 53 days. Each year, bitcoin mining consumes roughly 125 terawatt-hours, on par with the annual power consumption of the entire country of Pakistan, and its annual carbon footprint is comparable to that of Morocco, according to Digiconomist.
As such, several businesses in the industry are pursuing more sustainable methods for mining or, alternatively, forgoing participating in the ecosystem until its environmental costs are mitigated. Earlier this year, Tesla CEO Elon Musk said the automaker will no longer accept bitcoin for car payments out of concern over the “rapidly increasing use of fossil fuels for bitcoin mining.”
Dorsey, head of both Square and Twitter, has been an outspoken bitcoin fanboy, positing in 2018 that it will become the world’s single currency within 10 years. Square revealed in February that it had purchased $US170 ($218) million worth of bitcoin as part of a larger investment in cryptocurrency. On Friday, Dorsey tweeted that Square is “considering making a hardware wallet for bitcoin” built entirely in collaboration with the community.