Crypto mining and the enormous energy demand always cause discussions in the crypto industry. But the industry is on the way to a greener future!
Crypto Mining Goes Green
Greenpeace launched a campaign to “clean up Bitcoin” and mining companies collected data on the type of electricity used to secure the Bitcoin network. After all, it makes a difference whether the electricity comes from a coal-fired power plant or a hydroelectric power station. Hydropower plants save up to 97.7% of greenhouse gases.
In the near future, even more efficient mining rigs will be launched on the market, and mining companies themselves regularly launch green initiatives. For example, Bitmain joined the US Merkle Standard for sustainable Bitcoin Mining in February.
The Merkle Standard was launched to improve North America’s negative carbon footprint in the mining of digital assets. In eastern Washington, Merkle uses standard hydroelectric power plants for Bitcoin mining. And also Bitmain was entrusted with the development of a clean mining infrastructure.
El Salvador relies on volcanoes
Shortly after the president of El Salvador, Nayib Bukele, made Bitcoin a legal tender last September, he already announced the next big step: Bitcoin mining, which is powered by geothermal energy.
This energy source has some advantages compared to solar and wind energy, as it can be used 24/7 and 365 days a year.
El Salvador is planning to build a Bitcoin city near the geothermal vents. The whole thing is financed by Vulkananleihen. The head of the ambitious project is Samson Mow, former chief strategy officer of the Canadian blockchain company Blockstream. Mow plans to issue $1 billion worth of bonds through the Liquid Network, a scalable layer 2 network for Bitcoin transactions.
At the end of the bond chain will be the crypto exchange Bitfinex. Bitfinex uses both the Lightning Network and the Liquid Network of Bitcoin. The bonds can be purchased as securities either in BTC or in USD. Ultimately, half of the bond proceeds will go to the purchase of Bitcoin and the other half will go to the financing of the energy and mining infrastructure of the Bitcoin City. However, the success of the project depends on the increase in the value of BTC.
A picture of BeInCrypto
Hydroelectric power plants for Bitcoin Mining
In addition to geothermal energy, hydropower is an important component of renewable energies due to its reliable stability. Hydroelectric power plants are ideal for use in Bitcoin mining, as they often provide excess energy during the snowmelt and the rainy season. Without a suitable storage option, this energy is lost.
For example, when the hydropower plants in southwestern China are ramped up, the authorities will lower electricity tariffs to a record low of US $ 0.03 per kWh. This pricing mechanism promotes the excessive consumption of cheap energy.
Bitcoin mining farms are often used as a reservoir for this waste. An example of this is the 100-year-old Alta Novella hydroelectric power station in northern Italy. The turbine room of the power plant houses 40 ASIC miners.
Crypto Mining: Using Wasted Gas
The largest US oil and gas producer ExxonMobil is working on a pilot project in North Dakota to use energy in Bitcoin mining that would otherwise be wasted. In cooperation with Crusoe Energy Systems, a company specializing in flaring natural gas, Exxon redirects natural gas to generators, which then supply Bitcoin miners in shipping containers. Without this diversion, the gas would have been burned. Exxon has been working on this project since January 2021.
If you are not familiar with gas flaring, here is a brief explanation: if drillers come across a natural gas formation and the gas cannot be collected and transported safely and in time, it will be burned instead.