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Financial services and digital payments company Square Inc. is partnering with blockchain technology service Blockstream Mining to build a solar-powered bitcoin mining facility.
Specifically, Square is investing $ 5 million in what will be a “proof of concept” for a way to mine popular cryptocurrency in a sustainable manner.
Square, which you might recognize as the company behind all those white coffeeshop credit card kiosks, might not look like a bitcoin titan. But this is just the latest move in a series of companies trying to tackle the elephant in the cryptocurrency room – how much energy digital money is absorbing.
Why Square loves Bitcoin
Square CEO Jack Dorsey is a big bitcoin guy, which is probably a big part of why Square has taken such a big step here.
But it also makes sense for business goals, as Square is in financial services and, if bitcoin stabilizes, it could become the next move in the currency it targets. The Squares Cash app currently supports bitcoin.
The goal behind this new $ 5 million investment is pleasantly easy to analyze. With their new installation project, Square and Blockstream hope to completely stop the narrative that bitcoin is not sustainable.
They are very clear about this in their press release, which notes that their goal is a “large-scale 100% renewable energy Bitcoin mine” and that they will make the whole process open to the public, ” operating costs and return on investment ”to all the economics behind their success. From the exit:
“We hope to show that a renewable real-world mining facility is not only possible, but also empirically prove that Bitcoin is accelerating the world towards a sustainable future.”
In other words: please don’t destroy the whole bitcoin ecosystem, folks, this can totally work.
Find out how much a Square POS system would cost your business.
So will it work?
Critics have argued for years that bitcoin’s energy consumption makes it a doomed harmful product. The process of creating each new part is sporadic, involving a lot of IT equipment running all the time, with all the power consumption and risk of overheating that this entails.
As the value of bitcoin increases, companies around the world are increasingly likely to engage in bitcoin mining, making its lack of sustainability an even greater concern. In July 2019, when a thousand illegal bitcoin mining machines destabilized the Iranian power grid, a single bitcoin was worth around $ 10,495.
Today it is worth around $ 34,117 and uses more power than Pakistan.
Over the past few months, the conversation about sustainability has intensified, in part because of Tesla CEO Elon Musk’s tweet in May that Tesla will stop accepting bitcoin until it ” switch to more sustainable energy “. Tesla hasn’t resold any bitcoin – a sign that, like Square, he’s betting bitcoin can overcome the problem.
Other companies are placing similar bets, such as antivirus software company NortonLifeLock’s recent investment in Ethereum, a cryptocurrency that is trying to develop a more energy-efficient iteration.
The future of Bitcoin depends on sustainability
Square really wants this to work: The $ 5million they’re investing now isn’t much compared to the $ 50million the company invested in buying bitcoin last October, plus another $ 170million. last February.
The good news is that the bitcoin industry has been forced to solve its problem with energy consumption. The bad news is that they still have this problem.
If Square gets enough solar power to turn the generation of bitcoin into a completely safe product for the environment, bitcoin will continue to advance and we will increasingly pay for our coffee (or any retail service) with money. bitcoin. And if bitcoin fails to cross this milestone, the entire industry will lose billions.
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