The blockchain financial system is going to be around to flourish, and there is little ambiguity about it. Many new areas for corporate and public sector development have opened up as a result of this new crypto-backed economy. One of these opportunities is cryptocurrency mining which is carried out using a mining rig which is a sophisticated computer devoted to solving algorithmic problems to produce new tokens and authenticate transactions.

This particular mining process consumes a lot of energy. Currently, Bitcoin's yearly power usage alone is around 145 TWh, which constitutes about 0.30 percent of world energy use, according to the University of Cambridge. As the cryptocurrency market continues to rise, so does the strain on the world's power networks. However, the emergence of new sources of income, enhanced load management, and even faster growth of the long-term resources of renewables are possibilities that crypto mining presents to the energy sector.

That being said, the surging prices of energy have made it increasingly expensive for miners to mint new coins along with causing an economic downturn across almost all countries. In these times, blockchain and crypto technology can play their role against energy inflation in a multitude of ways

Leveraging Blockchain to Scale Up Energy Efficiency Investment

Ramping up energy efficiency investments seems to be rather more achievable by appealing to investors' perceptions of risk. An innovative financial technology, such as the cryptocurrency peer-to-peer paradigm that is predicated on the confidence fostered by its immutable and unfalsifiable shared database, can be helpful in addressing the notion of risky energy efficiency investment.

A majority of the pilots that have already been conducted in Europe have shown to be substantial money and time savers. As a consequence of the elimination of gatekeepers or intermediaries, blockchain transactions lead to reduced costs, faster processing times, and more systemic versatility. We are more likely to build structurally more reliable, adaptable, and autonomous energy systems with this approach. The UN Framework Convention on Climate Change (UNFCCC) has acknowledged blockchain's potential to promote decarbonisation. As a result of its benefits in accessibility, cost-efficiency, and performance, it may facilitate more successful stakeholder engagement.

Replacing Proof-of-Work with Proof-of-Stake Protocol

The proof-of-Work (PoW) protocol is energy-intensive as it requires computing power to solve cryptographic problems which are used for verification purposes. That's why miners rely on ASICs and powerful graphics cards that consume too much electrical power. To reduce the dependence of blockchains on electrical power grids, crypto projects can move to the proof-of-stake (PoS) protocol which relies on authority and the magnitude of investment to authenticate transactions on the ledger.

Demand and Load Management to Regulate Pricing

In the energy market, varying consumer participation in managing short-term electricity supply and demand has become a trend. Adaptive solutions have become more crucial as both the percentage of variable alternative energy sources and the consumption of power continues to rise. Users who are inclined to limit their power use at specific periods in exchange for a rebate or compensation are generally less expensive than installing additional production capacity to fulfil peak load. This Dynamic Pricing model can keep costs down for both the company and its consumers.

Energy-guzzling equipment like air conditioners and desalination plants may cause seasonal fluctuations in consumption in hot regions. For a charge, power companies can manage excessive strains with the help of cryptocurrency mining.

Finding Sustainable Ways to Mine Cryptocurrencies

The enormous energy consumption of the blockchain is mostly due to the computer rigs utilised by cryptocurrency miners. As a result, solar and wind-powered crypto mining is now a possibility. These ideas aim to lower the ecological footprint and establish that there are ways to keep the mining process sustainable, even if it uses a power-intensive, proof-of-work mechanism to validate transactions.

When mining isn’t dependent on the power generated by conventional energy resources, the demand will automatically fall which will translate into a price reduction.

Enabling Power-Efficient Transportation

The blockchain may encourage individuals to engage in energy-saving activities, such as purchasing electric cars, by providing a financial incentive to do so. Yet, a major deterrent to purchasing electric vehicles is a lack of supporting facilities. They may reside in regions where there are few or no charging points for electric vehicles. They may be worried about going out of fuel in an unexpected location if they often travel by car.

Blockchain-based peer-to-peer systems can help locate local electric vehicle charging facilities. It goes without saying that better and more efficient management of power consumption can help curb inflationary trends in the energy sector.

Final Word

The world’s energy infrastructure will likely be affected significantly by the growth of digital currencies and the operations of proof-of-work miners. The correct legislative and economic strategy for cryptocurrency mining may result in favourable benefits for authorities as well as utility companies, including an informal advancement of the expansion of alternative energy sources and reducing energy inflation.

FAQ

How does Coinpanion work?
We help you to invest in the cryptocurrency market like a professional. Simply select a smart portfolio and get started straight away.

We help you to invest in the cryptocurrency market like a professional. Simply select a smart portfolio and get started straight away.

How much does Coinpanion charge?
If you invest in a portfolio (and not in a single cryptocurrency), a service fee of 2% per year is charged. The fees can be viewed at any time in your transaction history.

If you invest in a portfolio (and not in a single cryptocurrency), a service fee of 2% per year is charged. The fees can be viewed at any time in your transaction history.

Who can invest?
You need to be over 18 and live in a country that is part of the European Union or the European Economic Area (Switzerland, Liechtenstein, Norway, Iceland).

You need to be over 18 and live in a country that is part of the European Union or the European Economic Area (Switzerland, Liechtenstein, Norway, Iceland).

Can companies invest?
Yes, we already have several corporate clients. The minimum investment for corporate accounts is €25.000. Please send us a request to support@coinpanion.com and we will take care of it.

Yes, we already have a large number of corporate clients. The minimum investment for corporate accounts is €25.000. Please send us a request to support@coinpanion.com and we will help your company along the way.

What is the minimum deposit?
The minimum deposit is €50.

The minimum deposit is €50.

How long does it usually take for my transfer to arrive?
That depends on your bank. On average, a transfer takes 1-3 working days.

That depends on your bank. On average, a transfer takes 1-3 working days.

How can I set up a savings plan?
After you have transferred your first deposit, you can easily set up a savings plan in your dashboard. The minimum monthly investment is €10.

After you have transferred your first deposit, you can easily set up a savings plan in your dashboard. The minimum monthly investment is €10.

When will the start bonus or referral bonus be credited?
The start and referral bonus will be credited within 48 hours after receipt of payment.

The start and referral bonus will be credited within 48 hours after receipt of payment.

What happens to my deposits and withdrawals?
Deposits and withdrawals are carried out via third-party providers who take care of the purchase and custody of the cryptocurrencies. Coinpanion takes care of the rest.

Deposits and withdrawals are carried out via third-party providers who take care of the purchase and custody of the cryptocurrencies. Coinpanion takes care of the rest.

How can I deposit money?
We have several payment options for you. You can deposit money with your debit card, credit card and with a direct bank transfer.

We have several payment options for you. You can deposit money with your debit card, credit card and with a direct bank transfer.

How/when can I withdraw?
You can withdraw at any time on your dashboard.

You can withdraw at any time on your dashboard.

Is there a minimum term?
No, you can withdraw at any time.

No, you can withdraw at any time.

In which currencies can I withdraw?
Withdrawals are possible at any time and are currently exclusively in euros.

Withdrawals are possible at any time and are currently exclusively in euros.

What is the difference between the Coinpanion portfolios?
Each portfolio has a unique allocation. You can find out more here.

Each portfolio has a unique allocation. You can find out more here.

Which cryptocurrencies are included in the portfolios?
Coinpanion offers risk and theme-based portfolios. Depending on the portfolio you choose, other cryptocurrencies are included. Learn more about it here.

Coinpanion offers risk and theme-based portfolios. Depending on the portfolio you choose, other cryptocurrencies are included. Learn more about it here.

How is the trading of the portfolios handled?
The cryptocurrencies are traded according to the portfolio's underlying strategy. You can also adjust this via the settings. All cryptocurrencies are traded via third-party providers. You can find more information in the terms and conditions.

The cryptocurrencies are traded according to the portfolio's underlying strategy. You can also adjust this via the settings. All cryptocurrencies are traded via third-party providers. You can find more information in the terms and conditions.

Can I invest in more than one Portfolio?
Yes, you can invest in multiple portfolios at the same time.

Yes, you can invest in multiple portfolios at the same time.

How can I take care of the taxation?
Generally, taxation depends on the legal situation in your country. Coinpanion gives you the possibility to download all transactions directly on the platform. In addition, we have a partnership with the cryptocurrency tax company Blockpit. Through them, we can offer you a complete tax report. In cooperation with Blockpit, Coinpanion offers you a complete tax report free of charge for download.

Generally, taxation depends on the legal situation in your country. Coinpanion gives you the possibility to download all transactions directly on the platform. In addition, we have a partnership with the cryptocurrency tax company Blockpit. Through them, we can offer you a complete tax report. In cooperation with Blockpit, Coinpanion offers you a complete tax report free of charge for download.