Green Bitcoin Mining: from Volcanos to Nuclear Power

Is there a way to mine Bitcoin in an eco-friendly way and avoid the carbon footprint it makes? Well, there are a few solutions. And the demand for them rises as climate change concerns grow.

Conversely, unsustainable mining is being extensively debated. For example, Swedish authorities are worried about the amount of energy mining requires and are afraid it will hinder their implementation of the Paris Agreement.

What’s the problem with mining, and is it really that harmful to the environment? Can we make mining greener, and if yes, — then how? Let’s try to give answers to these questions.

Environmental risks of Bitcoin

Bitcoin mining consumes an enormous amount of energy, and most of it is generated with fossil fuels. This leaves a considerable carbon footprint about which the concerns are growing — emissions facilitate the greenhouse effect that causes global warming.

To validate blocks, miners compete with each other in terms of computing power — the one who has the most gets the right to add a block to the blockchain and takes the reward. Since all miners work in parallel and only one of them wins, a lot of energy is simply wasted. Bitcoin mining consumes as much electric power as Switzerland or Greece.

Luckily, traditional green energy solutions such as solar, wind, hydro, and volcanic power plants can be adapted for Bitcoin mining. Lately, even nuclear power has been used. Let’s see how this works and what examples there are.

Mining with geothermal energy

You must have heard of El Salvador as the world’s first country to make Bitcoin legal tender. But there’s more to its passion on digital currencies — the government is to build an entire Bitcoin City. It is planned to locate the new settlement near a volcano whose energy will be used to mine Bitcoin. About 20% of electric power in El Salvador is already produced this way, so the new infrastructure doesn’t have to be developed from scratch.

Geothermal energy is also used in other countries that don’t boast many volcanoes. This kind of power is present everywhere on Earth — it’s universal that deep in the ground, it’s warmer than on the outside. A power plant that uses this rule has been built in Berlin, and it produces electricity for the whole country. Its turbines make 107 megawatts of energy, and a part of it is now used to mine Bitcoin.

Wind and solar energy for mining: how power supply is balanced in Texas

Texas is famous for its pro-crypto laws and one of the world’s lowest electricity costs; this goes with a high insolation level and strong winds. These are the reasons why a tech company called Lancium is to invest $150 million in Bitcoin mining powered by wind and solar energy in Texas.

When the construction is completed, power farms are supposed to produce more than 2,000 megawatts of energy. Importantly, they will be secured from typical green power drawbacks — sudden lack of sun or wind that can make a mining facility unprofitable. West Texas where Lancium is located has some of America’s strongest winds, and the sun is present almost all 365 days.

Another problem with mining of any kind is that sometimes it interferes with energy demands of other industries in a given area. Fortunately, there’s so much sun and wind in Texas that power plants produce more electricity that the state needs, so mining can easily operate. Whenever the weather conditions don’t allow for excessive power production, mining will be suspended until enough electricity is produced.

Now, you may have the question — why would miners settle in a region where they aren’t guaranteed a stable energy supply? Here is the answer: when there’s a high demand for electricity, the power grid operators in Texas pay the miners to suspend their activity. Thus, miners earn even a little more when their units are shut down compared to their operating state. Specific software monitors energy supply and demand in the grid and turns off all or some of the miners to balance the system.

Cleaning land from coal waste as a way to mine Bitcoin

Stronghold Digital Mining is a Pennsylvania-based company that collects tons of coal waste and transforms it into alternative energy used in Bitcoin mining. Cleaning the area from this waste saves the state from dangerous pollution that spoils water, soil, and threatens every living thing. Stronghold Digital Mining doesn’t simply tidy up and use waste for mining — it donates the cleaned land back to local communities.

As the company has raised over $100 million in 2021, its ambitions move forward. The enterprise is to buy more ASICs and polluted lands, and by 2022, it plans to install over 30,000 miners that will be powered by 200 megawatts of energy the company is to produce.

According to estimates by Stronghold Digital Mining CEO, it will take about 30 years to clean 1000 acres of purchased land from the coal waste. Every 200 tons of the removed pollutant help the company mine 1 BTC.

Natural gas mining in Canada

Natural gas is another type of energy source that is much greener than traditional coal burning. EZ Blockchain, a crypto mining company based in Chicago with a branch in Canada, has partnered with a gas provider from Texas to buy wasted natural gas and use it to mine Bitcoin in Alberta.

Wasted gas is a byproduct of oil extraction. When a drilling rig operates, some gas leaks because of corrosion or high pressure. Usually, oil producers simply burn it before releasing it into the atmosphere, which is of course damaging the environment. EZ Blockchain has invented a mobile machine that converts wasted gas into energy and has already installed some of the generators. One unit turns the excess gas into 1 megawatt of electric power. During years of operation, the company has produced over 55 megawatts using gas and other alternative sources of energy.

Hydropower for Bitcoin

Another Canada-based Bitcoin mining company Bitfarms is located in Quebec and is one of the world’s biggest enterprises of this kind. Since its launch in 2017, Bitfarms has used hydroelectricity to power over 99% of its operations. The company has 6 mining centers in Quebec and Washington, and each of them produces from 10 to 30 megawatts of green energy. The usage of hydropower plants allows Bitfarms to minimize its mining expenses.

The profitability of such a mining scheme lies behind the fact that the company can rely on its resources only and doesn’t depend on power/material supply from third parties. Bitfarm owns mining rigs and power plants and can operate on its own. Electricians and a repair lab help the company maintain its facilities in a proper state and mine at the best cost possible.

Nuclear energy for mining

Lastly, one type of carbon-free energy that is becoming more and more popular among Bitcoin miners is nuclear power. It’s impossible to create an in-house infrastructure of this kind, so miners have to buy energy from nuclear power producers. This is what a US-based company called Compass Mining does — it buys electricity from a power plant in Ohio and uses it to run its ASICs. A 20-year contract for 150 megawatts of energy has been signed.

Even given the fact that a few small nuclear reactors are to be built by 2023 and 2024, mining will become cheaper for Compass once it starts using the new type of energy. This is a good precedent to inspire other mining investors: a similar transition is already being discussed by companies in Florida and Pennsylvania.

Nuclear power has a great potential for mining. It’s carbon-free and a lot cheaper than electricity produced with carbohydrates. Although nuclear power plants bear their own considerable environmental risk, strict safety standards prevent all radioactive leaks, making these power plants one of the greenest ways to power mining today.

Bottom line

When Bitcoin had just been introduced, no one thought of the potential environmental risks that mining had. As the network became more popular, its hashrate rose, and BTC power consumption surged, sparking debate on the carbon footprint it produces. Bitcoin mining was mainly driven by fossil fuels and coal, and the amount of CO2 emissions have made the first cryptocurrency a target of green activists from the whole world.

However, miners are very much like businessmen, and they are constantly searching for ways to make their enterprise more cost-efficient. Luckily, today’s green solutions allow for doing so. According to Forbes, about 56% of energy used for Bitcoin mining globally comes from clean and renewable sources. This is in fact more than the sustainable electricity that the USA and China use together. The most part of this energy is made of sunlight and wind, but hydro-power, volcanic energy, and nuclear power are also on the list. As of 2022, we expect that the share of green energy in Bitcoin mining will only increase.