As an effort to reduce loss in solar energy production, the Blockchain research team at LR Physics came up with a set of ideas realized in a Proof-of-Concept. The project NRmine (Energy Blockchain Mining) develops innovative mining farms for cryptocurrencies.
These mining rigs (i.e. a set of computers working on mining cryptocurrencies) will be built in the most energy-efficient way in Israel and in Belgium. The system main objective is to deliver cryptocurrencies at the highest level of profitability by using solar energy.
How do cryptocurrencies work?
The cryptocurrencies are based on the blockchain technology. This one works as a decentralizes huge register in which all transactions are copied. Each of these copies, as well as the machines hosting them, constitute a node of the network. The blockchain is a technology from the world of cryptography and is not intrinsically related to finance, although this is its most widespread application today. It could be figured as a book where we add at regular intervals new pages (blocks), on which are registered the latest transactions.
This writing work is done by ‘minors’. Everyone can become one if they have the necessary hardware resources. And as any work deserves a salary, the system pays its miners by transferring them cryptocurrency created ex nihilo: this is how the new cryptocurrency is issued in this system. Minors also pocket transaction costs. Once a miner has completed a block, he sends it to the other nodes in the network, each of which confirms the new block and adds it to their copy of the chain.
The proof of work: the basic of mining
Using Blockchain’s proof of work validation method, each miner in the network has to perform time and energy costly calculations to encrypt all of the transactions. Since a block is created at regular intervals, the difficulty in finding the solution to the encryption is not only adjusted according to the number of participants in the network at the time of the calculation but also according to the number of transactions contained in the block and the previous block string.
The computer or group of computers which find the encryption solution broadcast the result to other network participants; these ones can easily validate without requiring computing power. The minor having found the solution is rewarded in new money according to the modalities defined by the cryptocurrency protocol.
From the rig to the mining farm
The more the network grows, the bigger the amount of computing power required increases – exponentially. Power constraints tend to centralize mining activities around dedicated pools or physical mining farm. It is nowadays unlikely for a single individual to engage in mining; and successful miners are invariably the ones with the most financial means to buy dedicated hardware. The rig is the basis unit of tools for mining. It consists of several graphics cards that deliver enough GPU to mine.
Energy Blockchain Mining using a green mining farm
The necessary building architecture of a mining farm is the same as a data center. Both consume electrical energy proportional to computing power and reject lost thermal energy.
Our mining farm will use off-grid electricity thanks to solar panels and the thermal energy will be reused through ORC machinery to reinject electricity. The idea is to develop a green system combined to circular economy.
From created cryptocurrency to trading
Once the cryptocurrency is created, it is recuperated by a wallet. Then these currencies can be traded in another crypto (or traditional) currencies on a marketplace to optimize the profitability.
This Energy Blockchain Mining process is therefore highly profitable, reaching between 12 and 30% return per year, depending on the local cost of energy.