tl;dr
Kraken is considering using nuclear energy to power its data centers. The crypto exchange is exploring partnerships with energy providers for small modular reactors in North America and Europe. This move comes in anticipation of increased demand for its services, especially in decentralized finance ...
Kraken is considering using nuclear energy as a power source for its data centers. The crypto exchange is looking to partner with energy providers that can supply small modular reactors. The company is exploring nuclear power options in North America and Europe.
Kraken is considering using nuclear energy to power its data centers, amidst an expected boom in decentralized finance (DeFi) and increased demand for its services, the company’s chief technical officer, Vishnu Patankar, said in an exclusive interview with CoinDesk. Kraken is not looking to build its own reactors, but is considering partnering with energy providers that can supply nuclear power with small modular reactors (SMRs). These reactors can be co-located with data centers and don’t have space or weather constraints, according to Patankar.
“With institutions moving into the crypto asset class and activity moving on-chain, the need for reliable fiat onramps continues to grow,” Kraken’s CTO said. “Bolstering our energy resiliency means we strengthen a direct avenue into the crypto ecosystem, supporting its continued growth.” The crypto exchange is looking to secure its energy supply given the massive surge in demand from artificial intelligence (AI) and high performance computing (HPC) firms which is changing the landscape in terms of power stability, Patankar said. Kraken is exploring nuclear power options in North America and Europe.
“Crypto’s round-the-clock and global nature means Kraken needs a constant supply of energy, particularly as we facilitate a larger proportion of global trading volumes,” Patankar said. Due to the 24/7 demands of running a cryptocurrency business and expected mass adoption of crypto over time, Kraken is looking at how it can scale its business in terms of energy supply and latency.
Kraken's exploration of the idea comes as more tech companies explore deals with nuclear operators to power data centers needed to meet the demands of artificial intelligence. The Wall Street Journal reported Tuesday that the trend is increasingly apparent, with firms including Amazon Web Services seeking to lock in contracts with nuclear plants to power data centers. Surging demand from power-hungry AI companies has seen bitcoin miners pivot away from crypto mining to supplying infrastructure for these firms.
“A nuclear backup means Kraken can continue to operate even if there was major disruption to local energy supply,” Patankar said, noting that “it adds redundancy and protects our energy resiliency so we can continue to offer round-the-clock products and services to our clients globally.” Whether running nodes for validators or for transactions, Patankar said Kraken is expecting a big boom in DeFi and because of this the firm’s energy needs could potentially be exponentially higher in the future.
Whilst a final decision has not been made yet, Patankar said Kraken was definitely considering nuclear power as an option as other alternatives such as wind and solar are weather dependent and energy storage also posed a challenge. A criticism often leveled at the crypto industry is that it is extremely wasteful in terms of energy usage, with proof-of-stake blockchains such as Bitcoin requiring huge amounts of processing power. Nuclear energy also suffers from similar negative perception but for different reasons, however, in this case it might be a more environmentally friendly solution. Any excess energy that is generated by the reactors can be captured and used to power the cooling systems of the data centers.
Disclosure: CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation. Author placeholder image: Will Canny is CoinDesk's finance reporter.
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