Bitcoin is going green. The Moonlite Project, which aims to mine a range of cryptocurrencies, plans to build a new center in Iceland powered entirely from hydro, geothermal, and wind sources. On Wednesday, it launched its initial coin offering to fund operations. If it takes off, it could cause other startups to reconsider how they source the cryptocurrency.
“I think it would be sinful to be burning coal to try to mine Bitcoin,” Eric Krige, founder and CEO of the project, tells Inverse. “That would send the world backwards, and we don’t want to be a part of that.”
Bitcoin is an energy hog because of the proof-of-work algorithm, which rewards miners for processing transactions by asking the computers to solve a complex puzzle and giving them crypto-tokens as a result.
Alex de Vries, who authored a Digiconomist article in November 2017 that looked at its energy usage, found the blockchain-based cryptocurrency’s annual electricity consumption is around 32.36 terawatt-hours, around the same amount of energy used by the entire country of Serbia.
“It’s a substantial energy use, and that’s why we believe that if we were to do this project we’d have to do it using green energy,” Krige says. “We are seeing a trend where the new projects coming out are focusing on green energy, and we think that’s definitely the way to go.”
Krige, an “entrepreneur at heart,” is not your classic crypto advocate. He started his first business in 2008, while studying for his strategic management degree, which he then sold in 2013. He then started a firm in the transport industry, powering deliveries for the agriculture industry in South Africa. Cryptocurrency is a marked change from farming, but he sees his background in managing large-scale operations as ideal for the project.
So far, he says the community is excited about the prospect of an entirely renewables-powered mine. The team is also working on other ways to give back to the local area, considering transferring the hot air generated to local businesses. The token-holding community would have to vote on the prospect, but Krige would be keen on giving the byproducts away for free.
The crypto-mine will come online in three rollout phases, with the first starting construction April 2 and switching on August 1 at a capacity of 15 megawatts. The coin offering funds will be used for setup costs, with 35 percent of the company’s annual profits used to buy back the MoonLite tokens which will then be burned. If successful, it could spark a new wave of eco-mining centers.