Mining is an essential but energy-intensive means of securing the bitcoin network. It is thanks to this process that millions of strangers can transact with complete trust, safe in the knowledge that the information stored on the blockchain is true.
Despite this, the energy costs of bitcoin mining have come under scrutiny, prompting calls for a greener way of protecting the network. A new mining company claims to have achieved a breakthrough by devising “the world’s first waste-to-energy crypto mine”, but does this claim withstand scrutiny?
Waste Not, Want Not
Like any industrial process, bitcoin mining is energy-intensive. While most of this power is gobbled up by the ASICs that are frantically crunching numbers, some of it is expended in the form of heat. Entrepreneurs have attempted to re-use this wastage, developing miners that will also heat your home or provide hot water. Despite well-meaning attempts to recoup some of the energy lost through mining, running hundreds or thousands of overclocked GPUs still comes at an enormous expense.
Standard American Mining claims to have developed a mining solution, however, that has close to zero waste. Renewable energy is commonly used in bitcoin mining, particularly in regions such as China’s Sichuan province, where a ready supply of cheap hydro power is gleefully lapped up by mining farms. Standard American Mining has taken a different approach, constructing a mining farm on top of a waste plant.
Where There’s Muck There’s Money
The waste-to-energy plant sees car tires fed in at one end and oil, steel, and carbon synthetic gas produced as outputs. The oil and steel are sold as commodities, while the carbon and syngas are used to produce the energy that powers the mining operation. Little is known about Standard American Mining, whose website comprises a holding page. Nevertheless, CEO Anthony Pompliano claims the firm’s mining power is zero-cost “because the rest of the business is profitable without monetizing the power. Only a waste-to-energy business can pull this off”. He stated:
Cryptocurrency mining involves hardware, software, and an energy source. The hardware and software will become commoditized over time, hence why Standard American Mining is focused on creating arbitrage situations with untraditional, near-free energy sources.
How Free is Near-Free?
Pompliano’s comments may be disingenuous, as any company wishing to harness a surplus of power will still be obliged to pay for it; plant operator PRTI weren’t simply going to let this energy go to waste had Standard American Mining not stepped in. Intriguing as the waste-to-energy mine is, there are few details in terms of its outputs, both hashrate and carbon footprint. Nevertheless, the scheme does hint at a possible future for bitcoin mining: large-scale miners striking direct deals with energy suppliers to capture electricity before it’s entered the national grid.
One expert who’s been eyeing the project with interest is cryptocurrency miner and Zencash business developer Rowan Stone. He told news.Bitcoin.com:
I think that sourcing renewable energy will be an essential part of crypto continuing to grow at its current rate. But when we talk about renewable energy, we talk about sources that cannot be depleted. That’s why the miners of tomorrow will power their mines with wind, water and solar energy – not car tyres.
Tires go in, bitcoin comes out.
The UK-based crypto miner has explored a number of renewable energy options including solar, wind, and steam, the latter using spent grain sourced from a local brewery. Each of these options was ruled out however on account of the setup costs or, in the case of steam, the CO2 emissions. Standard American Mining’s venture seems certain to fall foul of that last caveat. But the project raises hope that greener mining solutions may be on the horizon.
The amount of energy that bitcoin uses has been widely misreported, with at least one source claiming it to be significantly lower than stated. Several bitcoiners have countered claims that mining is unnecessarily wasteful by noting that the same can be said of Christmas lights, or bank offices.
Bitcoin at least adds measurable value, providing verifiable truth in exchange for energy – a price worth paying for the millions who use the digital currency. “Zero-waste” or otherwise, any innovation that can make bitcoin more environmentally friendly – whilst providing a cheap and plentiful source of energy – is to be welcomed.