An intersection of Cryptocurrency and Alternative Energy

How Proof of Work Works and Why It Is Efficient

A part of this section follows the structure of educator and serial Bitcoin entrepreneur Dan Held’s “PoW is Efficient

Bitcoin As A Network

Proof of Work mining utilizes Bitcoin’s strong network to confirm blocks. A network, in this sense, is a collection of computers that interact with each other through the internet, sharing files and encrypted messages. Each computer can better be described as a node and together, all 13,120 of them create and verify transactions. There are three main types of nodes on Bitcoin: full nodes, light nodes, and mining nodes.

Blockchain and Mining Algorithms

The Bitcoin blockchain is set up as an ordered back-linked list of transactions. Each new block added to the blockchain refers back to the previous block. The visualization of blocks stacked on top of each other results in the use of terms such as “height” to refer to the number of blocks since the first block, otherwise known as the genesis block.

Nonce

The nonce is a random number that when hashed and put into hexadecimal, has a certain amount of leading zeros:

Block Setup

Each block in the blockchain follows this set structure that allows it to connect to the block before it and the one after it.

Difficulty and Attacks

The target difficulty is what regulates Bitcoin’s block production time. Currently, one block on the Bitcoin blockchain is produced, or mined, every 10 minutes. With that being said, this is a highly calculated metric and the fact that it stays relatively constant is impressive.

Proof of Stake

Let’s imagine a PoW system in which I am the only miner. In this system, only 1 block is mined every hour and in return I am given a 1 COIN reward. Given I put in $10 worth of energy into mining that block, I would then sell the COIN for anything above $10 for profit.

Current Mining Hardware

Current mining hardware is utilized to output the maximum amount of hashes for the amount of energy used. Because of this, miners have evolved over the years to create better and more efficient hardware.

Energy Grids

Canada

The Canadian energy grid relies on both renewable and non-renewable energy sources. Hydro, wind, solar, and biomass accounted for more than 80% of Canada’s total electricity generation.

China

In Q4 of 2020, the CBECI reported that around 71% of PoW mining took place in China, the majority of which coming from four standout states: Xinjiang, Sichuan, Inner Mongolia, and Yunnan. Collectively, these states produced 63% of the global Bitcoin hashrate during Q4 of 2020.

Alternative Energy

All capturable electricity comes in through the movement of a turbine in a generator, but the difference comes in how the turbine is pushed. In the case of fossil fuels like oil and coal, the fuels are put in a furnace that boils water to produce steam, pushing a turbine.

Hydropower

The Dam and Reservoir System

For this system to work, a dam must be built on top of a reservoir. This dam blocks the flow of water nearly everywhere, leaving a small intake for water to flow through.

The River Barrage

A river barrage functions off of a river and not a reservoir, meaning that it can be placed at nearly any river. The water from the river flows into a turbine through a generator, creating electricity.

Tidal Energy

Tidal energy comes in the form of harnessing the oceanic tides, where kinetic energy from the tides are converted into electricity through a turbine. Both barrages and reservoirs have been built.

Flaring

Natural Gas Flaring occurs when oil is extracted from the ground. Gas flares out as a byproduct of oil mining, and is either burned off or released into the atmosphere.

Wind Power

Wind power has been around since the 17th century, with windmills being used to push grain through a feeder. Currently, massive windmills push a turbine with the power of the wind.

The Turbine

A traditional wind turbine captures rotational energy in wind and converts it into electrical energy. Both vertical and horizontal blades can be in place, with a vertical blade being able to capture wind in all directions but being much less effective compared to horizontal blades.

The Blade

The blade is the mechanism where rotational energy is transferred into mechanical energy. They are traditionally made of steel with a fiberglass and carbon fiber cover, usually around 40–90 meters long. To capture the most energy possible, three blades are sectioned equally, with 120 degrees of separation between them.

The Shaft and Gearbox

As the blades rotate, a low speed shaft moves at the same rotational speed. The shaft is connected to a gearbox, which multiplies the speed with a series of gears that rotate at a speed inversely proportional to the size of the gears.

The Generator

A variable speed generator converts the mechanical energy sent by the gearbox into direct current electrical energy, which is then fed through an inverter creating Alternating Current, which is then sent through power lines to be used by the consumers.

The Future of Wind Energy

Wind energy has a promising future. With the development of offshore wind, more energy can be captured with fewer environmental issues compared to onshore wind.

Vortex Bladeless

Vortex Bladeless’s solution is to utilize a principle called Vortex Shredding. For the system to work, a cylinder is fixed vertically with an elastic rod, which then oscillates by wind to create the alternating current.

Solar Power

Solar Fuels

Take, for example, solar fuels which are simply fuels that use the energy of sunlight directly, most typically being hydrogen, water, and carbon dioxide. The main advantage of these fuels is storage; storing a tangible fuel is a lot easier than storing current. These fuels can be distributed to a fuel cell in order to create electricity.

Artificial Photosynthesis

Natural Photosynthesis turns CO2 and H2O into sugars, with the help of sunlight. This process can possibly be replicated, turning a greenhouse gas into a fuel. Plants utilize a chloroplast, which functions as a light absorber (turning light into energy) and a catalyst to break down CO2.

Conclusion

The long lasting impacts of the Bitcoin network will help bring billions of people in the world to a better financial system.

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Aniket Majumder

Aniket Majumder

I’m Aniket, and I’m interested in how we can make humans fundamentally better through better disease prevention and innovation.