[2017-03-27] Can Renewable Solar Power Decentralize Bitcoin Mining Operations?

[TwoTimes]

Over the past few years, some bitcoin enthusiasts have found ways to use renewable energy sources such as solar power to mitigate electrical costs associated with mining the decentralized cryptocurrency.

It’s a well-known fact that bitcoin mining consumes energy. Many people don’t realize the global cost to run the Bitcoin network, with electricity costs at millions of dollars every year. Some believe this has led to a concentration of miners in countries where electricity is significantly cheaper, like in China. It is said that mining has also resulted in larger facilities leading the race to mine bitcoins, while smaller home-based miners are typically pushed out of the competition. However, some individuals and pools have found ways to compete by offsetting the cost of electricity by utilizing renewable energy sources.

Read More Here: https://news.bitcoin.com/renewable-solar-power-mining-operations/

[d5000]

The article is unfortunately a bit superficial. It doesn't dive in the "deep economics" related to solar power mining.

There are some facts that must be taken into account when analyzing the potential of solar power for Bitcoin mining:

- Production costs of solar equipment. I don't have ultra-recent data, but I think it was in 2015 that it was estimated that the energy needed to produce a standard solar panel is equivalent approximately to 1-2 years of the electricity production, depending on cell type and location.
- Lifespan of solar panels and other components. For panels, the estimated lifespan is about 15-30 years depending on the technology used (standard silicone panels are more robust). Other components like inverters and batteries must be changed, at least, every 5-10 years. So roughly every 10 years you must add one year of energy to cover production costs of additional units (every 20 years if using the best technology available).
- Competition of Bitcoin mining with other applications of solar power. In theory, if Bitcoin mining was a major application of photovoltaic power, then it would be a major demand factor and have influence in the price not only of solar panels, but also of "photovoltaic-friendly land".

I came to the conclusion that these factors, in present times, limit the potential profits and the "greenness" of solar mining only a little bit. But I lack the data to conclude if this was the case also if solar mining became widespread - as a consequence of its potential to "decentralize" mining - and replaced most of other electricity sources for mining.

[InvoKing]

Mining bitcoin = equipments + maintenance + energy
Solar Energy = equipments + maintenance
So in fact even having a ''free'' solar energy wouldn't make bitcoin mining available for everyone because simply the equipments' prices + the maintenance costs isn't that affordable...

[panju1]

Mining bitcoin = equipments + maintenance + energy
Solar Energy = equipments + maintenance
So in fact even having a ''free'' solar energy wouldn't make bitcoin mining available for everyone because simply the equipments' prices + the maintenance costs isn't that affordable...

Exactly! You have a lot of places where geothermal energy and hydro energy are just waiting to be tapped, but can't be used because of lack of grid connectivity or sufficient demand. That is one reason why mining farms were set up in Iceland.... It is not just about the electricity cost, it is about the cost of the mining equipment and scale of operations as well.

[d5000]

But the point is if "everyone" (or at least "many people") would run a solar farm - what would be the consequences? If solar mining costs decrease more, big solar (and other renewable energy) farms could emerge and would centralize the mining market again.

I'm not saying it's not a good concept, only would like to see more deep research on the topic.

[InvoKing]

But the point is if "everyone" (or at least "many people") would run a solar farm - what would be the consequences? If solar mining costs decrease more, big solar (and other renewable energy) farms could emerge and would centralize the mining market again.

I'm not saying it's not a good concept, only would like to see more deep research on the topic.

I doubt bitcoin mining will be decentralised ever even if many people could arrange to obtain a free/low cost energy because simply the main problem after the cost of energy is the mining equipments
It is kinda similar to the video games, you need the latest graphic card to run the latest version of a game, but after few years...you have to buy a new graphic card again if you want to play the latest game
Well, having a renewable low cost energy is good and could reduce a little bit the decentralisation that's all

[veleten]

renewable solar power is too costly at the moment to be competetive for miners
if one is only starting,he would be much better off investing into ASICS and equipment rather than investing into solar
solar power panels have ROI of at least 3-4 times worse than s9,for example
it is only if you have extra money and plan to use solar energy to profit in other areas too,selling energy or using it for other than mining businesses
then solar power could be useful for a miner
also decentralisation means being affordable,so any miner can just buy and start mining,this is simply not the case here