Affordable Energy Tapped for Power-Hungry Miners
This colossal power consumption explains why Bitcoin miners are so interested in sourcing affordable energy. Along with their increasingly efficient computers, the energy requirements of mining Bitcoin are the prime target for miners looking to get the competitive edge.
Simply put, the more energy-efficient a mining operation, the more lucrative it is. There aren’t any more competitive strategies than a focus on sourcing cheap energy.
Then, if the energy is clean and helps save the planet, too, that’s even better.
New Focus on the Environment
China recently cracked down on its own enormous Bitcoin industry. In June 2021, regulatory and environmental concerns came to a head and the Chinese government put many new restrictions in place that put downward pressure on crypto mining.
Thus, an exodus of miners began. Mining efforts were moved to countries with more affordable and readily available energy, including Kazakhstan, Russia, and Canada.
Crypto miners already in the United States have seen their own exodus, too. Mining efforts are moving off the grid and into independent, energy-efficient projects in states like Pennsylvania and Texas instead.
This shift has come at a time where local, national, and international governments are cracking down on major environmental concerns, too. Despite the new regulations, however, this recent migration of miners off the grid has led to the U.S. surpassing Russia, becoming the second-largest Bitcoin mining market after China.
Why Pennsylvania and Texas?
When the Chinese government cracked down on Bitcoin, many provinces were concerned about the energy-hungry mining operations and the stability of local grids. They were also concerned about Bitcoin mining undercutting their national climate goals.
States like Texas, in contrast, are actually using incentives to lure miners to their states. What’s the difference?
Energy-rich states like Pennsylvania, Texas, and North Dakota have their own environmental concerns, not unlike those of the Chinese government. Among them, oil producers in these states have been forced to flare (or “burn”) natural gas for generations due to the lack of infrastructure to transport it to processing plants. The resulting flare stacks have become an eyesore (and a sore spot) for industry stakeholders for years.
Those same oil producers would prefer to sell that natural gas, but how can they without the pipelines to do it?
Crypto container Bitcoin mining systems have swept in to use that stranded energy. Like EZ Blockchain’s unique Smartgrid, natural gas that would have otherwise been burned away is instead used to power highly sophisticated computers in a specially-engineered mobile data container mining Bitcoin.
Energy is the largest overhead cost for crypto mining. Recently, oil-rich states with immense stranded energy have provided opportunities for miners to come in and solve two problems in one, accessing their own affordable energy while doing away with gas flaring for good.
How Bitcoin Uses Energy
Miners of Bitcoin and other cryptocurrencies use sophisticated computers to solve complex mathematical problems. Those puzzles are required to complete “blocks” of verified transactions.
It’s this decentralized nature that has cryptocurrency enthusiasts so excited about the technology. No central bank or government has control over transactions or the value of coins. It’s all up to the miners instead, independent and spread out all over the world.
Miners go through the trouble of solving these complex equations because, once “blocks” of transactions are verified, the miners gain new coins as a reward.
Miners with the fastest and most efficient systems mine more coins faster.
Recent reporting has suggested that a single Bitcoin transaction requires the same electricity that an average household uses in 58 days. This number is shocking for most and has generated exactly the response that many opponents to Bitcoin want: alarm.
The same estimate then compared the carbon footprint to that of a typical Visa transaction and found that the Bitcoin transaction has a footprint of 1.8 million Visa transactions. Even more shock and alarm.
However, these estimates disregard the energy required for the many systems that support Visa. The Bitcoin mining network is completely independent of any other system. Visa, on the other hand, relies on ACH technology, national and international banking organizations, correspondent banks, the Fedwire, SWIFT, the Fed, and even the military of the countries who use it.
Bitcoin does require a great deal of energy to power the validation of transactions on the blockchain. The value of Bitcoin continues driving new mining efforts, however, and the demand has driven more energy-conscious competition as a result.
Bitcoin Value Tops at Almost $60,000
Bitcoin miners in China rely on a mix of clean hydropower energy along with common fossil-fuel sources like coal.
In Kazakhstan, however, half the country’s energy is drawn from coal, and the other half is drawn from oil and gas. Miners who have recently relocated to that country will therefore now have a larger carbon footprint there than they did in China.
Considering how China tightened its grip on Bitcoin mining in an effort to minimize its own carbon footprint, this is a sad reality.
Miners in Canada and the U.S. are among those setting a new alternative. With efforts like the EZ Blockchain Smartgrid using energy that would otherwise be wasted, combined with the computational power of more efficient, mining-specific data centers, the carbon footprint of most mining efforts could be reduced to nearly zero.
With a market value today of more than $860 billion, Bitcoin has been trading in August at close to $50,000 per coin. This is after reaching almost $60,000 in April. Crypto miners who find new energy partners and a cleaner way to do business will be those who come out ahead.
Wasted Natural Gas Finds a New Purpose
Oil and natural gas companies have come under growing pressure from governments and investors to reduce their emissions. The Biden administration has brought this issue into the limelight with his plans to crack down on methane leaks and other sources of environmental concern in the U.S.
Methane, research shows, is 82 times more potent greenhouse gas than carbon dioxide. It’s also the primary ingredient in natural gas.
EZ Blockchain has modeled a new approach to help oil and gas companies tackle the issue of natural gas waste while also powering Bitcoin mining.
Natural gas is flared and is also left “stranded” underground during oil exploration. Now, that gas can all be put to use. EZ Blockchain installs its Smartbox mobile mining containers on-site at oil production fields to turn the natural gas into electricity using a natural gas generator. The electricity is used immediately to power the mobile container’s Bitcoin mining.
This system requires no additional infrastructure from the oil producer.
Other oil-rich states like North Dakota and Wyoming have seen the writing on the wall, too. Each state recently passed bills that exempt oil drillers for taxes on any natural gas they offer to Bitcoin miners who set up shop at their wells.
EZ Blockchain’s Mobile Crypto Mining Unit
The mobile crypto mining units, when paired with the 1.5-MW natural gas generator, are called the EZ Smartgrid. EZ Blockchain’s own co-founder and CEO, Sergii Gerasymovych, was recently quoted saying: “We can help [OAG producers] monetize their gas. Crypto is basically cleaning up after the other guys, doing everyone a favor.”
The overall environmental impact is up to 60% lower than if those oil and gas producers had flared or vented the methane-rich natural gas into the air, Gerasymovych added.
60% lower environmental impact
The EZ Smartgrid gives miners a huge opportunity, too. Bitcoin miners that use the electricity generated by the Smartgrid pay a starting price of $75 per kW.
New demands in the fast-growing Bitcoin industry have turbocharged creative solutions to get affordable and cleaner energy. For better or worse, the world of energy production has many existing messes that miners have come in to clean up.
The future of Bitcoin will be clean, stakeholders say. Enough proof is seen in the market today that the possibilities for the future are more exciting than ever.