The MoonLite Project wants to mine cryptocurrency without the environmental baggage
Last year, cryptocurrency could do no wrong. Now, its reputation is in doubt. Not only are many cybercriminals using people’s phones to mine the stuff without their consent, but the estimated energy draw is more draining than the entire power consumption of Ireland. Just yesterday, Bill Gates suggested it’s likely killing people “in a fairly direct way”. In short, cryptocurrency is at a tricky juncture: it’s far from a safe investment, and its reputation is at risk.
You might think that would be an odd time for the MoonLite Project to emerge. Launching today with an Initial Coin Offering (ICO), it’s a facility to mine cryptocurrencies at an industrial level. The twist is that it aims to do so without inflicting any environmental damage on the planet: the facility will be powered by 100% renewable energy.
It can do this because of its location. Land will be broken in Iceland on 2 April this year, and the plan is for the operation to be powered exclusively by geothermal, hydro and wind sources, with the first coin mined in August. “The moment we realised how much energy we would be using, and how much coal it would be using, the first thought was ‘this has to be a green initiative, otherwise we’re just laughing at global warming’,” CEO and founder Eric Krige tells me when I speak to him over the phone.
As well as appealing to a certain kind of investor (“I can’t even put a number to it,” Krige tells me when I ask how many investors specifically cite the MoonLite Project’s green credentials), the cost of energy to mine the cryptocurrency is pleasingly priced – even compared to countries with an oil surplus. Coming in at roughly 4.4 cents per KWh, the green energy available in Iceland is competitive with Qatar – the cheapest they could find in the world. “One reason we chucked [Qatar] out was because it’s 100% carbon-based fuel sources for energy,” Krige recalls. “But they had a very big surplus and we could get it for 4 cents per Kwh.” Less than half a cent extra to go completely green. “That’s not even a hit, we’re really proud to be able to do it,” he explains.
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It’s just as well the energy is cheap, because the MoonLite Project is no two-bit operation. “In the first phase we’ll be consuming roughly 14.6-14.8 megawatts, which is roughly the same as 15,000 households worth of energy, and we obviously have plans to expand on that,” Krige tells me.
That’s just phase one, which will focus on Bitcoin, Bitcoin Cash and Litecoin. The second phase increases the Bitcoin operation and adds Dash, before phase three doubles capacity for all of them, while adding Etherium into the mix. Although some of the hardware is single purpose (I’m told the plan is to use a mixture of hardware including SHA-256 and Antminer D3Es), the system also has some artificial intelligence in the mix to decide which currency to focus on and when.
“Just as an example, if Bitcoin is not profitable and Bitcoin Cash is more profitable, our systems will detect that faster than what we could do on 24 or 12 hour manual checks,” Krige says.
The elephant in the room
Shortly after interviewing Douglas Barrowman and Michelle Mone about their Bitcoin development in Dubai last year, I finally got on the cryptocurrency bandwagon. Knowing that while I could make a fortune, I could equally be burning money, I eventually settled on a humble £105 split between Bitcoin, Ethereum and Litecoin.
At one point, this investment pot was worth £570; a phenomenal return in anybody’s book. Then Bitcoin crashed, and it had dropped to £230 on the day I interviewed Krige, with one Bitcoin costing £5,165.
That, it turned out, would be the low point for the time being, and the currency has since rallied to over £7,000 again – perhaps vindicating Krige’s bullish response at the time. “I think everybody in their right mind would ask that question, however this is kind of a strong point for our ICO and for our project. I had this conversation not even 15 minutes ago, incidentally,” he adds with a chuckle.
“The depressed currency values are having a negative effect on sales, but I think that’s just temporary, and I think it’s based on the acquisition value of the currency that people don’t want to part with, rather than anything on a macroeconomic scale.
“So of course if we were to sell our Bitcoin today, we would get $7,500 at this point in time, but if we sold it three weeks ago it would be $16,000. Our standard operating procedure would be to retain the currency that we’ve got and sell it at a more opportune time.
“In terms of cash flow and stuff, we plan to be extremely well capitalised, and can hold the coins for two, three or four weeks for the prices to bounce back as they usually do,” he adds. “Just as a side note, this [Bitcoin dip] happened five times last year, so we can look at the trend and know we could carry it for that period of time.”
And Krige does have history with cryptocurrency – though probably not quite as long a history as he would like. “I think I first discovered this thing called Bitcoin in 2010… and I kind of thought to myself ‘this is just really a fad, and I’m not going to put $1 into it.’” That $1, as he well knows, would be worth $750,000 today.
He eventually got on the cryptocurrency train in 2015 – well in advance of things really taking off last year. And despite the recent troubles, he’s confident that cryptocurrency – and especially Bitcoin that he has a soft spot for – is here to stay. “Whether the powers that be like it or not, I think it’s reached a critical mass that’s impossible to stop and I’m very bullish about Bitcoin in the future.”
With environmental issues potentially eliminated, this certainly removes one big argument against cryptocurrencies’ viability. Plenty more remain, however.