The complex world of crypto mining could soon be coming to Central Otago. Reporter Jared Morgan speaks to a Dunedin software engineer who is concerned about a lack of visibility into plans for a “data center” in the area.
Late last month, Contact Energy announced plans to build a data center in the shadow of one of its key assets, the Clyde Dam.
One word that was missing from the announcement was “cryptocurrency”.
Still, cryptocurrency mining installations are a common addition to power plants around the world.
Why?
Because they are power hungry.
Dunedin software engineer Oscar McNoe said Contact would need to find out about the proposed data center near the base of the dam in advance.
Mr McNoe said he believed the plans focused on mining blockchain / cryptocurrency online – a form of online transactions.
He believed that the energy company had to be transparent.
“ At the very least, they should know in advance that this is just a crypto mining system and that it will likely increase electricity prices for all of New Zealand. ”
On August 31, Contact announced that it and its 100% owned energy solutions company, Simply Energy, will be supplying renewable power to a data center being developed near the dam by UK digital infrastructure company Lake Parime.
Under the contract with Lake Parime, Contact would provide 10 MW of renewable power to operate the planned low-carbon data center.
That corresponds roughly to the electricity consumption of 10,000 households.
Mr. McNoe said, according to Lake Parime, that it has assisted customers with “machine learning, blockchain, visualization, modeling and artificial intelligence.”
Online information about Lake Parime’s business and hardware suggested it was largely, if not exclusively, about blockchain / cryptocurrency mining, he said.
”She [Lake Parime] don’t use their hardware for anything else.
“ They don’t do intensive hardware and software development – they might buy hardware and software from China and install them in a place where you can make money with it. ”
It is important to note that the hardware / software is cryptocurrency-specific and not universally applicable, McNoe said.
Links to Lake Parime, which were checked by the Otago Daily Times, appear to support the links to the cryptocurrency.
The London-based company’s CEO, Sath Ganesarajah, previously worked as a consultant for a company called Digital Capital Research, which specializes in cryptocurrencies.
Mr. Ganesarajah’s blog focused solely on currency and a job ad for Lake Parime said an interest in “blockchain, cryptocurrency (Bitcoin and Ethereum) and other high-performance computing applications would be beneficial”.
There was no suggestion of any other use for a data center, and Mr McNoe said he couldn’t see any other use for it other than mining cryptocurrencies.
“ Part of the problem is that it doesn’t add to the economy in any way and, in the end, it just shouldn’t be appropriate. ”
He said that potential cryptocurrency mining could be a good use of electricity resources, but it seemed more likely to increase electricity bills for everyday households.
“It’s not a real data center that offers jobs and opportunities for local businesses – it’s just several massive cryptocurrency mining boxes that will only increase electricity demand and prices.”
Contact generates power and sells it in the New Zealand market, but by building the data center, he believes the company would then compete with consumers, he said.
Recent data suggests that cryptocurrency mining consumes 0.5% of all electricity consumed worldwide, about seven times as much as Google does in its global operations.
An analysis by Cambridge University suggests that Bitcoin and Altcoins consume more electricity annually than Finland, Belgium, Austria and Switzerland.
The latest available data on the University’s Cambridge Bitcoin Electricity Consumption Index (cbeci.org) says that if cryptocurrencies were a country, they would rank 34th in the world for energy use, consuming 98.2 terawatt hours (TWh) of electricity per year .
For comparison: New Zealand ranks 59th worldwide with 41.1 TWh.
The university uses the index to record usage every 24 hours.
jared.morgan@odt.co.nz
Cryptocurrency
- Cryptocurrency uses cryptographic signatures to verify all transaction records.
- These transactions are recorded on a blockchain and created in the same way as cryptography (the science of hiding information).
- Digital signatures can be used to keep the transactions secure and to allow others to verify the authenticity of the transactions.
- The first cryptocurrencies were developed in such a way that they are free of state-issued currencies.
- Cryptocurrencies use “decentralized control”, meaning they are not controlled by any person or government – unlike “centralized” electronic money and central banks.
- Control of each cryptocurrency is done through a distributed ledger (a list of transactions shared by everyone), usually a blockchain, which serves as a public database for financial transactions.
- Bitcoin, which was first released as open source software in 2009, is often referred to as the first decentralized cryptocurrency.
- Since then, more than 4000 cryptocurrencies (sometimes also called “altcoins” – short for alternative coins) have been created.
- ” Mining ” for the cryptocurrencies is power hungry and requires heavy computation to verify transactions.
source https://www.bisayanews.com/2021/09/11/concerns-data-centre-for-cryptocurrency/
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