Bitcoin mining & energy
4 energy sources that could power the future of Bitcoin mining
Can you imagine a world where Bitcoin plays a central role in the global energy grid?
Energy is a crucial component of the Bitcoin economy and infrastructure. Not only does it power all mining computers, but it’s also a critical factor in any mining operation’s finances.
As a result, miners are constantly looking for clean and low-price energy sources. In that scenario, unthinkable collaboration opportunities between energy producers and Bitcoin miners have emerged.
Here are the four most interesting power sources that could be the future of Bitcoin mining.
Geothermal energy
Nayib Bukele made history when he became the first president of a sovereign country to declare bitcoin as legal currency.
Furthermore, the resolution wasn’t only financial, but infrastructural: with the adoption of bitcoin as an official means of exchange also came a state-developed wallet, a nation-wide bitcoin ATM deployment, and the construction of a public mining facility at the foot of one of the renowned Salvadoran volcanoes.
And thus, volcano-powered Bitcoin mining was born.
Geothermal energy consists of heat derived within the sub-surface of the earth — in this case, generated by volcanic activity. The high temperatures heat up the reservoirs of hot water found deep below the earth’s surface, turning it into steam.
Then, geothermal power plants capture and use that steam to rotate a turbine that activates a generator, which produces electricity.
Geothermal energy is clean and renewable, as it leverages the virtually unlimited supply of heat provided by our planet’s core. Additionally, it’s a reliable power source, as generators run 24 hours a day, 365 days a year. This makes it an attractive electricity provider for Bitcoin miners.
The long history of this type of technology demonstrates its long-term sustainability, and geothermal-powered Bitcoin mining has barely started. Hopefully, miners will provide the necessary demand for geothermal energy infrastructure to develop further, making our planet a cleaner, more sustainable place.
Natural gas energy
Seems contradictory to cite renewability and clean energy as advantages of geothermal-powered mining; and jump to natural gas energy immediately after. In a world so committed to move away from fossil fuels with each passing year, arguing for natural gas being the future of Bitcoin doesn’t make sense.
Bear with us, we promise it does.
The truth is that natural gas still makes up a considerable portion of the world’s energy. According to the EIA, 38.3% of the United States’ power comes from natural gas. However, as most fossil fuels do, this technology often receives backlash for its significant carbon footprint and greenhouse gas emissions.
Fortunately, Bitcoin mining can help reduce these emissions while boosting energy efficiency.
How can this happen? During the oil refining, producers have to dispose of a gaseous byproduct called methane. Methane is both a powerful greenhouse gas and more than 25 times as potent as carbon dioxide at trapping heat in the atmosphere. Emissions of this gas are the second-largest cause of global warming today.
Although useful as fuel, methane is cumbersome to capture and transfer efficiently. More importantly, the IEA estimates that leaks across the natural gas value chain account for 60% of this gas emissions.
So, the way oil producers currently treat methane is through a process called flaring, which consists of burning it, turning into CO2, and venting it into the atmosphere. Despite this being less harmful to the environment, it’s both still polluting and a monumental waste of methane.
This is where Bitcoin comes in.
Bitcoin miners provide a large and steady demand for energy, and can run anywhere with an internet connection. Therefore, by installing ASICs in their facilities, oil producers can transform methane into electricity through a generator and feed it to the miners on-site.
That way, they not only avoid harming the environment through flaring and leaks. They also turn an otherwise wasted natural resource into profits, stacking sats in the process.
Here’s more on how Bitcoin can treat waste from the oil and gas industry:
Nuclear energy
The backlash from the general public and the decreasing prices of other — less effective — energy sources like natural gas have delivered a tough blow to nuclear energy producers. As a result, governments are decommissioning nuclear reactors worldwide.
However, despite the general dislike towards it, nuclear energy is among both the cleanest, most efficient, and most reliable energy sources available. Furthermore, it’s also the least expensive to generate considering levelized costs of energy (LCOE).
Levelized cost of energy (LCOE) is a metric that calculates the present value of the total cost of building and operating a power plant over an assumed lifetime. This allows comparing different sources — wind, solar, natural gas, nuclear — of unequal lifespans, project sizes, different capital costs, and capacities, among other factors.
Nuclear energy is too precious of a resource to leave behind. Its reliability and efficiency place it as one of the most sustainable power sources, especially thinking long-term into the future.
Nevertheless, due to the reasons we’ve mentioned, nuclear plants are struggling to source the necessary demand to remain operational in the short term.
In that regard, Bitcoin miners are the ideal partner for nuclear power plants. Cheap, clean energy is the main priority for miners, and nuclear power is a perfect fit.
Thinking long-term, it’s not too crazy to envision ASIC miners running on every nuclear energy plant, continuously hashing new blocks powered by the very same facility hosting them. This would provide energy producers not only with steady demand, but also with an additional source of revenue in BTC.
All in all, nuclear energy and Bitcoin mining have everything lined up for a long-term collaboration that carries with it too many benefits to ignore.
Read more about the potential between a Bitcoin-nuclear energy dynamic:
Tidal energy
Tidal energy is a renewable form of power that leverages the natural rise and fall of ocean tides and currents through different technologies. Some of these include turbines and paddles.
However, tidal energy is still barely emerging. It’s one of the most modern forms of generating electricity we have, but yet to be optimized and further developed. Engineers are working to improve the technology of tidal energy generators to increase the amount of energy they produce and decrease their impact on the environment.
The progress of this technology is still held back by some significant barriers, being the cost of development the most challenging.
Another limitation is the low availability of suitable locations for tidal energy facilities, since not all coastal bays and tidal channels offer the required conditions for effective power generation. Furthermore, among those limited locations, not all of them are near the grid, requiring further investment to install infrastructure like lengthy undersea cables for transmitting generated electricity.
As tidal energy producers strive to develop more effective and robust devices and build the necessary infrastructure in suitable locations, it also faces the challenge of high costs.
In that regard, Bitcoin mining presents itself as an effective way to reduce costs during the research and development phase of this new technology. Indeed, mining can provide this rising industry with a steady source of revenue and stable demand for energy to test new equipment simultaneously.
This way, engineers can conduct trials and research without building costly infrastructure beforehand; all while earning bitcoin rewards in the process.
Hopefully, both Bitcoin mining and tidal energy will evolve hand in hand.
Conclusion
Energy is a critical aspect of Bitcoin’s infrastructure. Essentially, the network relies on it to enforce security and high-performance.
However, the dynamic between Bitcoin and energy is bilateral. Bitcoin requires a lot from energy and its infrastructure, but it can also support it in ways beyond most people ever imagined.
In other words, Bitcoin’s high energy demand is neither a negative nor positive aspect, but rather what each one of us chooses to make of it.
What’s clear is that this technology has the potential to scale the world’s energy infrastructure. If successful, Bitcoin will not only become the global financial standard, but also a key factor in the development of the energy grid of the future.
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