Hydro66

Blockchain Infrastructure Is Sustainable - Here's Why That Matters

Written by: Paul Morrison

Running a data center like Hydro66 means being in front of the market. Business is never as usual when you are attempting to change the game. Reducing the carbon footprint of data to zero and simultaneously cutting client costs by 50% is a huge paradigm shift. It means implementing radical technology ideas and being open to combining those with new business models. That's where value can be created both for our customers and for our investors.

So it’s no surprise when the watchers and commenters start to opine on your progress. The opinion piece dated 7th November 2017 “The environmental costs of bitcoin are not worth the candle” in the Financial Times attempted to highlight the impact on the environment of cryptocurrency computing. We have been working with blockchain infrastructure for almost four years now and is a subject we are knowledgeable on, comfortable with and excited by.

What the journalist failed to note is that much of the cryptocurrency activity takes place in very low cost green power regions - for example the Nordics and Washington State, USA. Energy cost is a competitive differentiator in the crypto space, and so obviously there is a migration to where power is highly available at the best prices. The 100% green hydro-electric energy typically available in these regions is long term sustainable. For example, the energy we use at Hydro66 has an operational CO2 footprint of 0.04g per kWh. As a comparison, electricity generation in Germany has a CO2 footprint of approaching 500g per kWh, or 12,500x more than our data center in Sweden.

Additionally, absorbing surplus generation capacity near the point of origin is much more efficient than transporting electricity over long distances to population centers, and is therefore environmentally desirable and cost favourable. Further, being located in these cooler climate latitudes also drives data center efficiency from not having to rely on mechanical chilling. And almost as a final bonus, all this capacity running on ultra-reliable industrial scale utility grids.

For all of these reasons the Internet giants such as Facebook, Apple and Google have recognized the benefits of locating hyperscale data centers in cool climate sustainable regions. And we would argue cryptocurrency data centers are a great example of  “Task-specific data centres which can optimise everything from the CPU level up and thus scale things much more efficiently”, as the same journalist noted three years back. 

Of course, the larger scandal in the data center industry remains the one described in the older article also in the Financial Times from September 2014, “The dark side of data centres” and written by the same journalist, ironically. Now, as then, data center owners and operators wilfully locate in dirty power regions, salving the corporate conscience with greenwash power purchase agreements and carbon offset schemes. How many data center location decisions are made by corporation tax specialists constructing elaborate schemes to shift revenues around, and how many are made by data center engineers? And all the while supported by a vested interest network of equipment manufacturers relying on out of date infrastructure solutions made necessary by being located in sub-optimal city centre locations.

For reference cryptocurrency data processing consumes perhaps 1-2 GW globally compared to the 50 - 60 GW data center industry. So where should we focus our energies for maximum impact? The minority blockchain infrastructure players typically using clean green power, or the majority legacy data center industry consuming dirty power in city centres?

Also I think everyone new to this area could spend some time researching the difference between 'Bitcoin the currency' and 'blockchain'.  Bitcoin the digital currency is a single application out of thousands currently being developed on blockchains. So for example, blockchain infrastructure is relevant in payments, capital markets, banking, insurance, supply chain, security, identity, healthcare, energy, IoT, regulation, tax, crime prevention...the list goes on and on and on. Why? Because blockchain is a foundational technology, similar to the Internet. Currency is one application, maybe the first and most familiar to the man in the street, but still - just one application of thousands.

Cryptocurrency / bitcoin / blockchain is a hot topic and a soft target, such is the nature of decentralised concepts. In the same way that criticising the Internet for being a refuge of scoundrels was 25 years ago was also a sloppy meme at that time. This criticism was lazy and predictable and entirely missed the point then - let’s not make the same mistake of inventing ways to criticise cryptocurrency whilst missing the larger value to society of the blockchain.

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