Tech Tent: Green Bitcoin and innovative engines
A brand new technology is eager to show it won’t destroy the planet. Meanwhile a tech business, founded more than 100 years ago, wants to prove it can use big data to prosper without damaging the environment.
On this week’s Tech Tent we explore whether Bitcoin is going green and if the jet engine business Rolls Royce can still innovate.
The key idea behind Bitcoin and other cryptocurrencies is that they are decentralised and nobody is in charge.
But this week a group of North American Bitcoin miners, with the encouragement of crypto-enthusiast Elon Musk, decided to take charge.
Well, to be clear, the members of the self-appointed Bitcoin Mining Council decided they would act to deal with a major image problem for the cryptocurrency: its energy use.
As Tech Tent has reported, the process of creating new coins and recording transactions uses as much electricity each year as a country the size of Argentina.
That issue has seen China and Iran move to ban cryptocurrency mining, and that has contributed to the wild swings in the Bitcoin price seen recently.
Jaime Leverton, chief executive of Hut 8 Mining, one of the members of the Bitcoin Mining Council, tells the programme the aim is to “counter the noise and some of the misinformation that’s coming at the Bitcoin mining industry”.
She says they want to “shape the narrative around the cryptocurrency industry’s energy usage” to address concerns that the industry is not environmentally friendly.
She insists that Bitcoin mining equipment – essentially computers packed with specialised chips – is getting much more efficient and quotes a study showing 39% of the energy used in mining comes from renewable sources.
But North America only accounts for a small proportion of mining, with much of it taking place in China using electricity from coal-fired power stations.
Even if there is a ban in China, Reuters is reporting that many miners are planning to move to oil-rich Kazhakstan, with its abundant cheap, non-renewable energy.
The finance writer Frances Coppola, a long-term critic of cryptocurrencies, concedes that the North American miners are now taking the environmental impact of their activities seriously. But she points out that even a greener Bitcoin presents many problems.
“Bitcoin, because it is an add-on to existing financial systems, actually increases emissions – it’s going to increase emissions just because it exists. And there are also things like the ransomware threats – criminals use Bitcoin for ransomware demands,” she said.
While this new technology is grappling with its impact on the climate, a much older industry – air transport – has been under pressure to cut its carbon footprint for years. Coupled with that, the effects of the pandemic have had a disastrous impact on the industry’s finances.
But on a visit to the engine-maker Rolls Royce, founded at the beginning of the last century, we found a workforce determined to innovate its way out of trouble.
At its Derby plant, a vast new engine test facility opened this week, designed for the new UltraFan engine which the company says will “redefine sustainable air travel” – though it will be the end of the decade before it goes into production.
Elsewhere, new technology – from snake robots that allow keyhole surgery on engines to augmented reality training applications which means airline engineers don’t have to travel to Derby to update their skills – is helping to cut costs.
But the key to a sustainable future for both the environment and Rolls Royce’s finances is data. These days, every engine sold is packed with sensors constantly sending data back to Derby for analysis.
The company’s chief digital officer, Stuart Hughes, says collecting that information is vital if engines are to be kept in the air rather than in the repair shop as long as possible.
“Some of our engines when they came off an aeroplane might take up to 200 days to go through the repair shop,” he explains.
“We use that data to reduce the amount of time that an engine is unavailable to the airline – data is absolutely critical.”
Two very different technologies, cryptocurrencies and aerospace, are trying to adapt to a fast-changing world.
But what is fascinating is how differently they are valued by investors.
Rolls Royce, after major cuts to its workforce, still employs more than 40,000 people, but the market currently puts a value on the business of about $13bn (£9.2bn).
By contrast, the cryptocurrency exchange Coinbase – a new arrival on the stock market – is valued at over $50bn.
Still, as we have seen over recent weeks markets can change their minds very quickly. It is perfectly possible that the engine-maker will be worth more than the crypto exchange a year from now.