I’ve written before on the water and electric consumption of datacenters and the wisdom of developing them in arid locales. Today, I want to discuss the difference between wholly wasteful and preventable water and electric use and “necessary” water use.
First, the why? Datacenters are inevitable in our digital economy. Efficient datacenters located in areas with abundant water supplies are necessary development to be endorsed. Datacenters developed without regard to the waterscape, make little sense. I’ll give you an example.
Amarillo receives 19-20 inches of precipitation per year on average, an arid geographic region characterized by sage brush, arid grasses, and cactus. Fermi America proposes to construct 18 million square feet of datacenters powered by four small nuclear reactors and one gas generation facility. One of the principals is Rick Perry, former Governor of Texas. The name given to this, Project Matador, is not the name on the Federal Nuclear Energy Commission application (the NEC approves and regulates all nuclear power plants). The applicant listed is The Donald J. Trump Advanced Energy & Intelligence Campus. Now that’s a name that should get a quick approval. Never mind that nuclear plants typically use 20-50 gallons of water to generate ONE kilowatt hour (1 kWh) and this project advertises it will generate 11 Gigawatts (11.0 million kWh) in the arid locale of the Texas panhandle. Do the math.
While no one questions the need for datacenters (after all, it took electrical energy and computing power to generate this article), datacenters are not just necessary to supply the nation’s computing and AI future. Those are what I would label “necessary uses” that drive datacenter development. The unnecessary and wasteful use that is also driving datacenter development is cryptocurrencies.
There are many cryptocurrencies out there but perhaps Bitcoin is the best known. Bitcoin alone required a reported 175 Terawatts/year of electric energy last year. That’s 175 billion kilowatts. While renewable energy generation requires virtually no water consumption, coal, nuclear, and gas generation requires serious quantities of water to generate the stream necessary to spin turbines to generate electricity. Given that cryptocurrencies have no social, economic, cultural, or employment value, the need is wasteful. Cryptocurrencies are merely financial tools. They do not create jobs. Investing in the stock market means you are investing in companies that generate some service or product that benefits society or at least the employees that work for those companies. That can’t be said for cryptocurrencies. They’re a waste one can do without.
But they are a great investment tool you say. If you really believe that, you haven’t been looking at your investment lately. Just like recycling, we can all do our little part in the future. So, when it comes to deciding whether to add cryptocurrencies to your portfolio, I harken back to the wisdom of former First Lady Betty Ford, Just Say No.