Ukraine Considers Mining Cryptocurrency to Manage Excess Energy

Ukraine Considers Mining Cryptocurrency to Manage Excess Energy

By Benson Toti - min read

The Ukrainian government is considering investments in cryptocurrency mining as a means to deal with excess energy. 

Due to a surplus in energy produced by Ukrainian nuclear power plants, the Ukrainian Ministry of Energy is considering redirecting these resources to cryptocurrency mining.

Mining cryptocurrency is known to be an energy-consuming endeavor. Miners need to use massive amounts of computer power to verify previous transactions on the Bitcoin chain. This can only be performed on huge amounts of sophisticated tech hardware. In the past, environmental activists have voiced out their concerns on the carbon emissions released by hardware as a byproduct of its work.

Max Krause and Thabet Tolaymat, two independent researchers, have calculated that generating $1 in Bitcoin can take as much as seventeen megajoules of computer power. This does not factor in the energy used for peripheral activities, such as cooling computers and other accessories.

It’s a stark contrast to the five megajoules needed to mine $1 in gold, or the seven megajoules to mine a similar value in platinum.

In an announcement released by the ministry, the government pointed out that the COVID-19 outbreak has led to an excess of nuclear energy around the country as well as the urgency of the current situation.

The Ukrainian government believes that a viable solution to utilizing excess electricity is to redirect it to mining cryptocurrency.

“This not only allows to maintain the guaranteed load on the NPP but also will make it possible for companies to raise additional funds,” their message reads.

This follows an announcement from the government last February declaring that mining cryptocurrency remains an unregulated industry.

Ukraine appears to welcome the integration of cryptocurrency, and the government has voiced out that its goals for the digital sector are to help decentralized technologies thrive.

The government plans to create a space where the “formation and implementation of state policy in the field of digitization, digital economy, digital innovation, e-governance and e-democracy, development of information society; assuring the development of virtual assets, blockchain and tokenization, artificial intelligence” can thrive in the local economy.

Prior to this initiative, power plants have been used to mine cryptocurrency in the past. A Cointelegraph report in March wrote about a private power plant located in the New York Finger Lakes region that focused its efforts on mining Bitcoin, which added roughly USD$50,000 to its daily revenues.

However, this is the first time that this initiative will be put to action on a government scale.