FinancialCentre reports- Armenia to rent out old thermal power plant for crypto mining
London, UK, 5th Feb 2022, ZEXPRWIRE, Cryptocurrencies are a subset of alternative currencies. Unlike traditional currencies, such as the pound or dollar, cryptocurrencies operate independently of a central bank. They exist solely on the network of computers that generates them through cryptographic operations. The first cryptocurrency to be created was Bitcoin in 2009; it has since inspired hundreds more to join its ranks, including such notable players as Litecoin and Dogecoin.
The most important quality of cryptocurrencies is that they are not controlled by a central bank or government, meaning no one is in charge of generating more units, and no one can confiscate your funds. FinancialCentre Broker Joe Delaney says that this puts them in direct opposition to traditional forms of currency like the U.S. dollar and the euro, which are created and controlled by a central bank. Because cryptocurrencies have no middlemen, there is no transaction fee between sender and recipient. Transactions go through without a hitch, and once they’re finished, you can’t be charged for anything else associated with them.
In most cases, this convenience comes at a price, as each individual bitcoins can be broken down only so far. The coins are set to increase in value over time, but because they aren’t tied to any central bank or government, there’s no way of telling how much they’ll be worth tomorrow, next week or even next year. Currently, the most reputable and widely used cryptocurrency is Bitcoin. It was launched in 2009 by an anonymous programmer or collective known as Satoshi Nakamoto, whose true identity still remains unknown.
Similarly, cryptocurrency’s anonymity is its greatest security risk. Because there are no middlemen involved with processing transactions, criminals can’t track who owns which bitcoins. If someone steals your passwords, hacks into your account or gets a hold of your private encryption keys, he can clean you out in an instant. Delaney says that despite these risks, cryptocurrency has exploded into mainstream society. People are buying them, selling them, mining them and using them to pay for an increasing number of goods and services.
Crypto mining
Crypto mining is a process by which new transaction blocks are added to the existing blockchain through the computational effort of a computer. The miner is rewarded with a number of bitcoins for his efforts, and this serves as an incentive to keep the transactions going. It’s a computationally intense activity that most people wouldn’t even attempt, but for those with the resources to do so, it can be a lucrative business.
Crypto mining is a process by which new transaction blocks are added to the existing blockchain through the computational effort of a computer. The miner is rewarded with a number of bitcoins for his efforts, and this serves as an incentive to keep the transactions going. It’s a computationally intense activity that most people wouldn’t even attempt, but for those with the resources to do so, it can be a lucrative business.
It’s also an energy-intensive process. The reason for this is that when one computer in the network solves a complex math problem, it creates a new block to be added to the blockchain; all the other computers then race to solve another difficult math question, but only one can succeed. This requires lots of processing power to generate solutions, and since every transaction requires a certain amount of computing power, the more miners there are, the greater the network’s energy consumption.
Armenia’s plan
Armenia has decided to make use of its obsolete thermal power station, Hrazdan Thermal Power Plant (TPP). It is said that it was abandoned because it was inefficient and produced electricity at a higher cost which was not suitable. The plant is a natural gas-powered facility that is located in Hrazdan, Armenia. The authorities have decided to rent them out for businesses that can make use of them, such as crypto mining enterprises. Gas pipelines, water, and power lines are among the infrastructure that these enterprises will receive. It has also been announced that miners will be given the opportunity to install coal mining hardware.
Delaney says that such an arrangement is not without its problems. Since thermal power plants are designed to burn the fuel that they use, leaving them unused increases greenhouse gas emissions and wastes resources. Furthermore, the process of mining bitcoins is already associated with an exorbitant amount of electricity consumption. Armenia’s desire to attract crypto mining businesses could produce a surge in the country’s energy costs.
“The good news is that cryptocurrency miners are always looking for new opportunities, and they will go where energy is cheapest. Since these power plants were abandoned because they were unprofitable, it’s likely that the operating costs of these facilities would be significantly lower than other alternatives.” This would attract crypto miners and serve as a much-needed boost to the struggling Armenian economy and a lifeline to a struggling industry.
Disclaimer: Our content is intended to be used for informational purposes only. It is very important to do your own research before making any investment based on your own personal circumstances. You should take independent financial advice from a professional in connection with, or independently research and verify, any information that you find on this article and wish to rely upon, whether for the purpose of making an investment decision or otherwise.
