Cryptocurrency exchange Kraken considers going nuclear

Kraken considers using nuclear energy to power its data centers amid expected boom Decentralized Finance (DeFi) and increased demand for its services, the company’s CTO Vishnu Patankar said in an exclusive interview with CoinDesk.

Kraken isn’t looking to build its own reactors, but is considering partnering with energy providers that can provide nuclear power with small modular reactors (SMRs). These reactors can be co-located with data centers and aren’t subject to space or weather constraints, Patankar said.

“With institutional entry into the crypto asset class and on-chain activity, the need for reliable on-ramps to fiat currencies continues to grow,” said Kraken’s CTO. “By strengthening our energy resilience, we are solidifying a direct path into the crypto ecosystem, supporting its continued growth.”

The crypto exchange is looking to secure its energy supply given the massive increase in demand from artificial intelligence (AI) and high-performance computing (HPC) companies that is changing the landscape in terms of energy stability, Patankar said.

Kraken is exploring nuclear energy options in North America and Europe.

“The global, 24/7 nature of cryptocurrencies means that Kraken requires a constant supply of energy, particularly as we facilitate a greater proportion of global trading volumes,” Patankar said. Given the 24/7 demands of running a cryptocurrency business and the expected mass adoption of cryptocurrencies over time, Kraken is exploring how it can scale its business in terms of energy supply and latency.

Kraken’s exploration of the idea comes as more tech companies are considering deals with nuclear operators to power the data centers needed to meet the demands of artificial intelligence. The Wall Street Journal reported Tuesday that this trend is becoming more evident, with companies like Amazon Web Services looking to contract with nuclear plants to power data centers.

Growing demand from energy-hungry AI companies has pushed bitcoin miners to move away from mining cryptocurrencies to providing infrastructure for these companies. Core Scientific (CORZ) has signed a deal agreement with artificial intelligence company CoreWeave earlier this month.

“A nuclear backup solution means Kraken can continue to operate even in the event of a major disruption to local energy supply,” Patankar said, noting that “it adds redundancy and protects our energy resiliency so we can continue to offer products and services around the clock to our customers around the world.”

Whether it’s running nodes for validators or for transactions, Patankar said Kraken is expecting a big boom in DeFi and because of that, the company’s energy needs could potentially be exponentially higher in the future.

While a final decision has not yet been made, Patankar said Kraken is definitely considering nuclear power as an option, as other alternatives such as wind and solar are weather-dependent and energy storage is also a challenge.

The cryptocurrency industry is often criticized for its energy waste, with proof-of-stake blockchains like Bitcoin requiring significant processing power. Nuclear power also suffers from a similar negative perception, but for different reasons. In this case, however, it could be a more environmentally friendly solution. Any excess energy generated by reactors can be harvested and used to power data center cooling systems.