Bitcoin Forum

Amidst many other forms of crypto-skepticism, critiques of energy use by the bitcoin network should remain troubling even to true believers—especially given that we’re hurtling towards a grim climate catastrophe. But the Wall Street Journal describes a small but important real-world example of how things could be improved. The oil drilling operation Black Pearl Resources runs a small bitcoin mining node powered by natural gas that is a byproduct of crude oil extraction. The natural gas isn’t economical to transport or sell, and burning or venting it is harmful to the environment. Because the drilling operation is located near a tiny town (Marwayne, Alberta, population 600), there’s not even much need for the energy locally.

Enter bitcoin.

As reported by the Journal, an oil field consultant named Stephen Barbour last year set up a shipping container housing a few dozen bitcoin mining servers, all powered by Black Pearl’s byproduct natural gas. He has built and sold two other similar setups. As the WSJ notes, there could be a big market for the solution: In places like Texas, natural gas has sometimes become so abundant it must be essentially given away for free.

There is significant upfront cost for Barbour’s mining setups—as much as $130,000 for the container and generator, according to the WSJ, even before mining equipment is installed. The competitive nature of bitcoin mining means that frequent hardware upgrades may continue to be necessary, producing its own stream of e-waste and further expense. And, of course, to the extent that it relies on the larger fossil-fuel industry that is feeding global warming, there’s nothing fundamentally carbon-neutral about this form of bitcoin mining.

It’s also, of course, uncertain whether the up-front investment will turn into profit, depending on the price of bitcoin over the equipment’s lifespan.

But those caveats aside, the example highlights one of the least-appreciated advantages of bitcoin: Because they can be located anywhere with an internet connection, bitcoin mining operations can take advantage of energy supplies that are impractical for other uses. As explained in depth by Coin Center, the electricity used by bitcoin mining is, contrary to some narratives, not expended on “useless calculations.” The computationally-intensive hashing process is the heart of bitcoin’s distributed security scheme, making it just as important as the (no doubt carbon-intensive) steel doors that guard a bank vault. But, simply by virtue of its flexible location, bitcoin mining can potentially be far more efficient and environmentally friendly than a traditional bank vault.

Of course, we no longer store all traditional currency in giant metal boxes, but bitcoin mining is also more flexible than the private servers that run modern banking. Bitcoin’s redundancy allows miners to be located in relatively unsecure locations, like a remote shipping container: Destroying or stealing a bitcoin miner doesn’t touch the bitcoin that has already been mined. Bank servers, by contrast, are high-security data centers, requiring a diverse bundle of infrastructure and staff to protect. (And while they might not all be as power-hungry as a bitcoin mining center, all server farms use energy—a lot of it dirty.)

At various times in recent years, this geographic flexibility this has led to bitcoin mining concentrations near underutilized dams in China and geothermal power sources in Iceland. This isn’t a blanket solution to the bitcoin energy problem, but at the systemic level, it’s potentially transformational: You can’t park a New York bank branch in Mongolia, but a bitcoin server there can help secure money around the world.

This feature of the bitcoin system seems to still be underappreciated and underutilized. According to the Journal, Barbour, when trying to sell his concept, has met significant resistance from oil-field operators who don’t even know what bitcoin is. That means there’s a lot of cheap, otherwise-wasted power waiting to be added to the bitcoin network—and compete with miners running on more expensive, less systemically efficient juice.

https://breakermag.com/how-bitcoin-turns-wasted-energy-into-magical-internet-money/

I haven't actually thought of that until I have read it. It can be true that we might be wasting energy because of bitcoin mining. Imagine how much natural energy is it consuming world-wide if it will end up use less in the future, and how much bitcoin had been mined and lost forever due to hacking, lost wallet access, and etc. I think on the other hand, people who are mining should be using other forms of natural energy, especially green energy to mine bitcoin. That way it can lessen the fact that mining bitcoin which is something digital is harming the real world by wasting energy and using coal powered plant's energy as stated in the article.

Here we have a different perspective on bitcoin mining energy consumption from our usual "bitcoin mining is the devil" narrative pushed by mainstream news. It highlights bitcoin mining's mobility, how it can be leveraged to utilize pockets of surplus energy which otherwise would go to waste. Bitcoin mining's tendency to utilize environmentally friendly, green sources of energy, with a small carbon footprint such as geothermal are also noted, which could offset the urban legend of bitcoin mining relying primarily on hydrocarbon based fossil fuels such as coal or oil.

I'm not certain what impact bitcoin mining fueled by natural gas could have. There's a chance burning natural gas to power bitcoin miners is more environmentally friendly than releasing natural gas into the atmosphere. Some natural gases like methane are known to trap far more heat per mass than CO2 potentially making them more dangerous. I think methane breaks down to CO2 after its combusted which could represent a smaller carbon footprint over the long term.

I know mostly people are wasting energy in mining. But i think there will be a solution where we can mine without losing any energy. For example making electricity with the help of Solar panels system. But it required highly invest. I think only it reduce the waste of energy

....

Here we have a different perspective on bitcoin mining energy consumption from our usual "bitcoin mining is the devil" narrative pushed by mainstream news. It highlights bitcoin mining's mobility, how it can be leveraged to utilize pockets of surplus energy which otherwise would go to waste. Bitcoin mining's tendency to utilize environmentally friendly, green sources of energy, with a small carbon footprint such as geothermal are also noted, which could offset the urban legend of bitcoin mining relying primarily on hydrocarbon based fossil fuels such as coal or oil.

I'm not certain what impact bitcoin mining fueled by natural gas could have. There's a chance burning natural gas to power bitcoin miners is more environmentally friendly than releasing natural gas into the atmosphere. Some natural gases like methane are known to trap far more heat per mass than CO2 potentially making them more dangerous. I think methane breaks down to CO2 after its combusted which could represent a smaller carbon footprint over the long term.

But those caveats aside, the example highlights one of the least-appreciated advantages of bitcoin: Because they can be located anywhere with an internet connection, bitcoin mining operations can take advantage of energy supplies that are impractical for other uses. As explained in depth by Coin Center, the electricity used by bitcoin mining is, contrary to some narratives, not expended on “useless calculations.” The computationally-intensive hashing process is the heart of bitcoin’s distributed security scheme, making it just as important as the (no doubt carbon-intensive) steel doors that guard a bank vault. But, simply by virtue of its flexible location, bitcoin mining can potentially be far more efficient and environmentally friendly than a traditional bank vault.

New rules released by the Canadian province’s energy regulator Monday create blockchain as a client category of its own and order utility Hydro-Quebec to set aside an extra 300 megawatt for the industry, on top of 368 megawatts already committed. Applying companies will be judged on four criteria, including the number of jobs created, planned investments and heat recovery plans for the energy-intensive computing process that makes transactions with digital currencies possible.

Regie de l’energie also rejected a proposal by provincial utility Hydro-Quebec to have miners bid for power. Blockchain clients will continue paying one of two tariffs they’ve been offered so far, in most cases the same as large consumers such as manufacturers and data centers.

The decision ends a moratorium that had been put in place to let the province figure out how to deal with requests from the energy-hungry industry. Quebec offers the lowest power rates in North America and saw surging demand. A survey of potential clients by Hydro-Quebec indicated there’s still demand for thousands of megawatts, even after the price of Bitcoin went down last year, spokesman Jonathan Cote said in an interview.

No such thing as "wasted" energy right now.  We won't have an excess of energy for a few decades yet.

I still think a lot of people think that the electricity that is put into bitcoin mining somehow "goes to waste".

The reality is that it serves a purpose, just like how energy put into facilitating transactions on networks like Visa or Mastercard serves a purpose. Without this energy input the bitcoin network would be unable to function.

And I'd argue that it's much more "green" and has less of a ecological footprint than precious metals mining, which essentially fulfils the same monetary functions to a lesser degree.

Oh... From the title, I was thinking energy like physical energy, utility invested into bitcoin but wasn't looking in the area of electricity and power until I read the post but then I'm thinking no energy should be estimated to have been "wasted" if without such energy, we won't get to have bitcoin. This new generational asset and investment.