Tech
Crypto Exchange Kraken Considers Going Nuclear
Kraken is considering using nuclear energy to power its data centers, amid an expected boom decentralized finance (DeFi) and the 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 exploring the possibility of partnering with energy providers that can provide nuclear power with small modular reactors (SMRs). These reactors can be co-located with data centers and are not constrained by space or weather, according to Patankar.
“As institutions move into the crypto asset class and activity moves on-chain, the need for reliable fiat on-ramps continues to grow,” Kraken’s CTO said. “Strengthening our energy resilience means strengthening a direct path into the crypto ecosystem, supporting its continued growth.”
Patankar said the cryptocurrency exchange is looking to protect its energy supply given the huge increase in demand from artificial intelligence (AI) and high-performance computing (HPC) companies, which is changing the landscape in terms of energy stability.
Kraken is exploring nuclear energy opportunities in North America and Europe.
“The 24/7, global nature of cryptocurrency means Kraken needs a steady supply of power, especially as we facilitate a larger share of global trading volumes,” Patankar said. Due to the 24/7 demands of running a cryptocurrency business and the expected mass adoption of cryptocurrency over time, Kraken is evaluating how it can scale its business in terms of power supply and latency.
Kraken’s exploration of the idea comes as more and more tech companies explore deals with nuclear operators to power the data centers needed to meet the demands of artificial intelligence. The Wall Street Journal reported Tuesday that the trend is increasingly evident, with companies including Amazon Web Services trying to block contracts with nuclear power plants to power data centers.
Growing demand from power-hungry AI companies has seen bitcoin miners shift from mining cryptocurrencies to providing infrastructure for these companies. Core Scientific (CORZ) has signed a Deal with artificial intelligence company CoreWeave earlier this month.
“A nuclear backup means Kraken can continue to operate even if there is a major disruption to local power supply,” Patankar said, noting that “it adds redundancy and protects our energy resilience so we can continue to offer products and services around the clock to our customers around the world.”
Patankar said that Kraken expects a major boom in DeFi, whether it’s running validator nodes or transaction nodes, and because of that, the company’s energy needs could potentially increase exponentially in the future.
While no final decision has been made yet, Patankar said Kraken is definitely considering nuclear power as an option, as other alternative sources such as wind and solar are weather-dependent, and energy storage is also a challenge.
A frequent criticism of the cryptocurrency industry is that it is extremely energy-intensive, with proof-of-stake blockchains like Bitcoin requiring massive amounts of processing power. Nuclear power suffers from a similar negative perception, but for different reasons, however, in this case it could be a more environmentally friendly solution. Any excess energy generated by reactors can be captured and used to power data center cooling systems.