Environmental and financial benefits for Uzbekistan
Following a presidential decree earlier this week, cryptocurrency mining companies are operating in Uzbekistanwhether domestic or foreign, exempt from tax if they choose to run on solar energy.
It is therefore an incentive for mining companies to use clean energy, as they are otherwise forced to pay the price of electricity. twice its value. In addition, prices are further increasing during regional energy consumption peaks.
It is Uzbekistan, a country rich in raw materials energy self – sufficientthanks mainly to its natural gas and the hydroelectricity it produces.
While Uzbeks eat almost half the energy per capita than the rest of the planetthe government has been developing green energy for several years, thanks in particular to solar panels.
In fact, the region enjoys a high rate of sunshine throughout the yearso this is an interesting opportunity for a Central Asian country.
Thus, while cryptocurrency mining is already legal in Uzbekistan, companies wishing to take advantage of the tax exemption sign up with an organization created especially for the event.
👉 What is Proof of Work (PoW)?
Cryptocurrency mining issues
The method proof of workor Proof of Work (PoW), that is especially used by Bitcoin networks (BTC) and Ethereum (ETH) to ensure their operation. However, this is a method that is often criticized, because particularly energy intensive.
According to Cambridge Bitcoin Electricity Consumption Indexa tool widely used to estimate the energy consumption of the Bitcoin network, we can see that the latter consumes for example more energy than used for gold mining.
A fairly significant example is energy consumption by country. In fact, if the energy used to operate the Bitcoin proof-of-work method were a country, that would put the 24th place of every country in the worldwhich is truly remarkable.
However, as this problem becomes more and more talked about, solutions are beginning to impose themselves. For example by using clean energy as Uzbekistan offers hereor even i using geothermal energyas especially recommended Nayib BucklePresident of El Salvador.
In the case of Ethereum blockchain, it is intended to solve the problem directly at source: the network must evolve towards a consensus of proof (or Proof of Betting), a method that blockchain has been known for ever since. combined speed and very low energy consumption.
Finally, the following the total ban on mining in China last year, many miners had to cross borders to neighboring countries, including neighboring Uzbekistan and Kazakhstan, where energy was more affordable. But today, these countries are worth finding forced to adapt to energy demand.
👉 To dive deeper: Crusoe Energy raises $ 505 million to mine Bitcoin with excessive gas flare
Sources: Reuters, Cambridge University
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