Wind Energy Bitcoin Mining: What You Need to Know
A recent study on wind energy and Bitcoin mining revealed that the ASIC Bitmain Antminer S19 Pro provides the quickest return on investment when miners invest in wind power plants.
So, is wind power the new Bitcoin mining frontier? What are the pros and cons of wind energy Bitcoin mining?
Let’s explore the correlation in this guide.
Why Investors are Exploring Wind for Bitcoin Mining
Bitcoin’s Power-Hungry Nature
The Bitcoin network is hardwired to self-protect its mining mechanism, so as more people try to mine it, the mining difficulty is adjusted. With its proof of work consensus algorithm, miners thus have to use more computing power to become the first to crack the string of characters and numbers, the hash. This explains why miners constantly seek more powerful rigs, which consume large amounts of power.
With much of the world’s electricity coming from non-renewable sources, much more electricity needs to be generated to maintain miners’ power demands. But environmentalists won’t watch Bitcoin and altcoins thrive at the expense of the environment.
Consequently, Bitcoin miners faced criticism over their massive carbon footprints, with the uproar affecting Bitcoin stakeholders and threatening its existence. In the worst-case scenarios, Bitcoin suffered outright bans, resulting in miners shifting to new jurisdictions as others shut down operations altogether.
A Year-Long Crypto Winter
Crypto winter is now a well-known term in the crypto community, particularly for its harsh effects. For Bitcoin miners, it’s the toughest period, during which only miners with strong reserves and those who achieve operational efficiency survive. It’s usually a prolonged period of a general bearish trend in the entire crypto industry. Bitcoin’s value depreciates significantly, and the mining incentive cannot meet the operational costs for most miners.
The first crypto winter occurred between 2017 and 2018, prompting rumors of a potential crypto crash. However, the market soon rebounded to hit an all-time high in 2020. However, the most recent crypto winter left the most impact. The year-long crypto winter struck amid a global economic crisis with skyrocketed power prices. The result? Many Bitcoin mining companies filed for bankruptcy as the survivors sought cheap, alternative energy and a concerted effort to turn to renewables, including wind power, which provided a means for operational efficiency.
Rising Grid Power Costs
Bitcoin mining is more of an energy conversion process. Miners use their high-power computers to convert their power into Bitcoin. Electricity is the most critical resource, which explains why hosting solutions provide colocation services per kilowatt-hour of electricity consumed. Therefore, the price or cost of energy directly impacts the profitability of mining. As miners strive to minimize costs and maximize profits, they are forced to look for alternatives to grid power. With wind energy, miners can run their rigs at little to no cost after the initial cost of a wind farm.
The Wind Energy Bitcoin Mining Market Outlook
In the US, wind power accounts for 9 percent of the total electricity generation. It is the second largest renewable energy source after hydropower.
Wind power generation has received massive government support through production tax credits. With most of Bitcoin mining happening in the US, the government’s approach to wind power generation makes wind energy a strategic and clean energy source for Bitcoin miners. In Texas, some counties have gone a step further by providing tax incentives for wind power, a move that has seen a Bitcoin mining boom in the state.
The mining hashrate in Texas has more than tripled since 2021, a situation partly attributable to wind power capacity development. For instance, according to Bitcoin miner U.S. Bitcoin Corp’s chief commercial officer, one of the company’s sites in Texas consumed about 173,000 MW of power in February 2023. About 40% of this capacity came from a nearby wind farm, while the national grid provided 60%.
Overall, about 14% of the Bitcoin mining energy comes from wind power, while solar and nuclear account for 5% and 8%, respectively. Collectively, all renewable sources contribute 54% of the total energy used, with roughly 44% coming from fossil fuels of coal and gas.
What Are The Benefits of Wind Energy Bitcoin Mining?
Harnessing wind power involves turning wind turbines in open fields to generate electricity. The wind turbines rotate their propeller blades around a rotor, which converts the kinetic energy in the wind to electrical energy. It is a clean source of power that is also dependable, infinite, and cost-effective.
Cost-effective
Besides the environmental sustainability objective, minimizing cost is Bitcoin miners’ core objective and the reason for exploiting alternative energy sources. Grid power must continuously be generated and transmitted to users, and the power lines also require regular maintenance. As a result, power companies have operational costs to incur as long as they are generating and transmitting power.
For wind power, it’s more of a one-time investment. Once Bitcoin miners set up a wind farm, they can continuously draw power from the farm at no extra cost. Therefore, although they may acquire, move, and install the multiple wind turbines needed to generate enough power for mining, which may be costly, it’s cost-saving in the long term.
Environmentally Sustainable
After Bitcoin miners were criticized for the energy-intensive nature of Bitcoin mining, most of them are now working towards alternative energy sources. Some innovative mining hosting companies like EZ Blockchain have developed innovative solutions like tapping stranded and wasted energy. They also use renewable sources of wind, solar, nuclear, and gas to power their mining operations. By turning to renewable sources like wind, miners can help reduce the global carbon footprint and meet environmental sustainability goals rather than being perceived as the biggest contributors of emissions.
Highly Efficient
According to an analysis by the World Economic Forum, wind energy is twice as efficient as its second most popular renewable energy source, solar. The best solar panels average between 250-400 watts with an efficiency of 20%. That means only 20% of the energy that hits the panel is converted to electricity. For wind, the efficiency is much higher at 50%. Therefore, Bitcoin miners who invest in wind turbines will get a higher return on their investment regarding the wind power they can harness.
Can Be Used On Site
One of the major challenges that have hindered the growth of wind power is transmission. Wind can be easily generated on wind farms, but it the cost of transmission or hooking the wind power up to the grid introduces a significant barrier. However, with wind energy Bitcoin mining, investors do not have to transmit the power generated as it can be used on-site. Bitcoin mining companies deploy data centers on-site and can use the wind to mine Bitcoin at the wind farms.
Are There Drawbacks to Wind Energy Bitcoin Mining?
Wind energy Bitcoin mining presents a great opportunity to turn around Bitcoin mining’s energy-intensive nature for the benefit of the environment. However, the solution still poses a few challenges for miners.
Does not Guarantee Miner Uptime
Miner uptime is a critical aspect of profitable Bitcoin mining. Ideally, miners need to keep their rigs running almost 24/7 to increase their profits. However, since it is difficult to store wind power, miners running exclusively on wind may experience downtimes in calm weather.
High Upfront Cost
Wind power is a sustainable energy source for Bitcoin miners and is effective in the long run. However, for miners to enjoy the cheap power, they must first invest a significant amount of money upfront to set up a wind farm.
Requires Locations with Space and Appropriate Weather Patterns
Miners must consider the location of their wind farms and how suitable it is for Bitcoin mining. Besides the large space already required for installing commercial wind turbines, you still need to deploy your miners on-site. Investors must thus have enough space for the turbines and data centers. The location also must have enough wind flow for the turbines to generate sufficient power, depending on the size of the Bitcoin mining setup.
Are There Wind Energy Bitcoin Mining Colocation Services for Small Miners?
Marathon Digital Holdings
Marathon Digital is a Bitcoin mining company that aims to enhance the Bitcoin network by finding sustainable ways to increase network hashrate. The company leverages the renewable energy sources of wind, solar, and hydro power. Marathon has multiple sites in Texas and North Dakota that run on wind power.
EZ Blockchain
Launched in 2017, EZ Blockchain is an innovative Bitcoin mining company focused on putting the best Bitcoin mining technology into the miners’ hands. The company provides mining hosting facilities with renewable energy. It’s among the top companies invested in renewable energy sources of wind, solar, nuclear, and gas. More than 65% of EZ Blockchain’s power comes from renewable sources.
Bitfarms
Bitfarms launched in 2017 to become a global enterprise with operations in four countries: United States, Canada, Paraguay, and Argentina. Committed to scalable and sustainable Bitcoin mining, Bitfarms has deployed a total of 240 MW of mining capacity in 11 locations. In 2023, Bitfarms marked its 21,000th BTC mined exclusively with renewable energy.
Summing Up
As the world struggles to combat the energy waste problem, Bitcoin mining presents one of the most viable solutions by tapping into underutilized and unexploited renewable and alternative energy sources. Despite being one of the cleanest energy solutions, wind power remains unexploited in the better part of the world. However, with the advent of Bitcoin mining and the need for sustainability, miners are accelerating wind power harnessing and using it for clean Bitcoin mining. By offsetting the grid through wind energy Bitcoin mining, miners can solve issues like grid congestion and Carbon IV Oxide emissions altogether.
