Go green or die?  Bitcoin miners aim for carbon neutrality by working close to data centers

Go green or die? Bitcoin miners aim for carbon neutrality by working close to data centers – Mail Bonus

Bitcoin (BTC) mining has always been a controversial topic. But the proof-of-work (PoW) model Bitcoin has gained new concern as senior decision-makers and investors better monitor environmental, social and governance factors.

As such, many cryptocurrencies focus on environmentally friendly practices by providing carbon offsets. Yet some would argue that this is not enough to secure green Bitcoin mining. Other risk factors may also be associated with carbon loans.

For example, Kevin O’Leary – the Canadian entrepreneur better known as “Mr. Wonderful “for his role in Shark Tank – told Cointelegraph that it usually indexes public mining companies such as Marathon Digital Holdings, Riot Blockchain Inc. and more. However, O’Leary points out that when these companies maintained carbon neutrality through carbon offsets, their inventories fell sharply. O’Leary believes this is because the US Securities and Exchange Commission (SEC) could soon plan to review carbon credits. O’Leary expressed his concern, saying:

“Carbon offsets are unpredictable. So indexers like me threw away these stocks – we had to sell. The only way that organizations will now invest in Bitcoin mining is for these companies to claim that there is no carbon involved.

Bitcoin mining and data centers

To ensure no carbon mining, O’Leary explained that Bitcoin miners should build parallel data centers. This would then allow mining companies to efficiently use the excess energy released from data centers to mine Bitcoin, leading to a “zero carbon transfer,” a process that produces zero carbon emissions.

Bitcoin mining company Bitzero started implementing such a model two years ago in Norway. Akbar Shamji, CEO and founder of Bitzero, told the Cointelegraph that the company initially built an infrastructure partnership with Norwegian municipalities two years ago, which led the region to release unused hydropower for Bitcoin mining:

“It was a great opportunity for us to try out this idea. At the same time, large data companies began to use renewable energy sources in places like Norway, but it was not profitable for the region. We have built a long-term, inexpensive 100% carbon power solution to have a market advantage. We earned money when we won our first Bitcoin in December 2021.

As Shamji was aware of the high demand for data storage today, Shamji further explained that electricity generated from data centers should be properly harnessed. “We call this the ‘Nordic model’. Electricity generation is available but it is still stuck at high voltage. So we implemented the power step from high voltage to low voltage and substation, which enabled us to run containers full of ASIC miners efficiently, “he said.

In other words, Bitzero directly reduces energy from the excess capacity of local hydropower plants, leading to zero carbon transmission. At the same time, Shamji explained that Bitzero is delivering fixed data centers made of sustainable and local materials consisting of thermal technology.

“In the case of Bitcoin mining, when electricity passes through these computers, the PoW algorithm does not take much energy to produce. “If this were not implemented, the heat generated from these computers would return to the air and be completely lost,” he said. Although the zero carbon transfer model has yet to be widely adopted, Shamji said that Bitzero typically processes 129 Bitcoin per month and uses 40 megawatts of power. He added that this will eventually grow to 110 megawatts.

The crypto-mining company Argo Blockchain also plans to open a data center in West Texas for mining. Although Argo does not use a zero carbon transfer method, Peter Wall, CEO of Argo, told Cointelegraph that the company aims to become carbon neutral:

“There is a huge amount of renewable energy in West Texas and Argo’s role is to process Bitcoin in an environmentally friendly way. We chose Dickens County specifically because it is a substation next to the property we chose to build Helios, our new flagship mining plant. “

Like Shamji, Wall is aware that clean electricity flowing through the Dickens County, Texas substation is stranded and is not new. “There is not much local demand or local pressure to use that power, so we felt it was a strong opportunity to help stabilize the system,” he said.

It is interesting to note that energy and gas companies are also establishing trade in areas where energy is emitted. For example, Alex Tapscott, author and co-founder of the Blockchain Research Institute in Toronto, told Cointelegraph that energy maker ExxonMobil has been quietly mining Bitcoin in the Bakken area of ​​North Dakota for a year as part of a plan to reduce emissions from burning gas. .

Gas flares in North Dakota. Source: Joshua Doubek

“The pilot project has been successful enough for the company to aim to implement it on a much broader basis. ConocoPhillips is reportedly working on a similar project, “said Tapscott. In addition, energy company Grid Share recently announced plans to open a Bitcoin mining data center next to a hydroelectric dam on the southern island of New Zealand to support 100% renewable energy in the region.

According to Tapscott, these actions may come as a surprise to many individuals who believe that Bitcoin mining is carbon-intensive. He explained that models like these can be useful in reducing carbon footprints:

“A typical Bakken well produces oil but also natural gas that burns off or flares into the atmosphere. This is an important source of carbon that is released into the atmosphere. Instead of flaring the gas, Exxon has partnered with Crusoe Energy in Denver to capture gas and transfer it to generators where it processes Bitcoin.

Tapscott added that Crusoe has discovered Bitcoin mining to reduce the world’s carbon footprint by up to 63%. “Gas that had no way of entering the market and had been burned directly into the atmosphere is instead being used as a fuel to beat the new Bitcoin.”

No carbon emissions

While green Bitcoin mining has always been a “buzzword”, some would argue that these features, coupled with zero carbon transfer, have become important for miners who want to do business.

For example, lawmakers are trying to pass laws that would completely ban green cryptocurrencies. This was recently demonstrated by the state of New York, where lawmakers are aiming to limit Bitcoin mining with a proposed bill that is now going through the state capital of Albany.

At the same time, the government of Kazakhstan recently required operators of cryptocurrency cryptocurrencies to report electricity consumption and “technical specifications” for connection to the electricity grid before use.

Although initiatives such as the Crypto Climate Accord aim to achieve zero emissions from electricity consumption from companies participating in 2025, this also raises concerns about how this can be achieved. Tapscott pointed out:

“This is a laudable goal, as long as it does not force Bitcoin to be something it is not. Some have even suggested changing the underlying Bitcoin code so that it uses a less energy-intensive consultation system to prove an item. This was a mistake. Proof of work is a feature that provides online resilience and strength.

From an investor perspective, O’Leary added that he will only invest in Bitcoin mining companies and data centers that can continue to be a sustainable energy source:

“Private capital must be in accordance with environmental, social and administrative practices. ESG was once a marketing concept, but now it’s real. I can not be subject to an SEC audit, and can not find an accountant who will sign these statements anyway. The cryptocurrency industry is at an interesting turning point.

To O’Leary’s point, Bitcoin miners are certainly facing a turning point, yet the clarity of the regulation is questionable. Bill Tapscott, CEO of CarbonX – a fintech carbon trading company – told Cointelegraph that the proposed information from the SEC is similar to what many companies already provide based on generally accepted information frameworks, such as the Task Force on Climate-Related Financial Disclosures and the Greenhouse. Gas booking. He explained:

“Disclosure creates a baseline where the next step for a government or regulator is to introduce a carbon tax or emission control and trading systems, such as ARB’s California Quebec Market or RGGI. Carbon credits are part of these plans and have been “reviewed” for many years. “

In light of this, Tapscott explained that miners would need to report their emissions, which will likely be high if energy comes from fossil fuels or even flare gases, or low if they come from green sources such as hydropower. “However, these companies can reduce the risk of carbon costs in the future by investing heavily in carbon credits,” he said.