Hello and welcome back!
This week, I wanted to highlight some interesting crypto mining innovations happening in the industry. These efforts typically get overlooked in discussions around crypto energy consumption, but they deserve to see the light of day.
I hope you enjoy, and see you next Sunday!
-Katja
Innovation in crypto mining
Last month, the Environmental Conservation Committee of the New York State Assembly moved along a bill that would ban proof-of-work (PoW) crypto mining for two years. To become law, the proposed legislation would need to get approved by the New York State Assembly, the state's Senate, and then the governor. The vote is set to take place tomorrow, April 25th.
Recently, the EU failed to pass a similar proposal, but NY may become the first state to accomplish such a feat in the US. I’ve discussed the misconceptions surrounding crypto energy consumption before, so, now, I want to bring attention to the innovations happening in this field.
In the crypto mining space, there are two different factors at play. On one hand, crypto miners seek to reduce the costs associated with mining...
“Energy consumption represents the largest operating cost for mining operations (79% of operational expenses on average). This makes bitcoin mining one of the most energy price-sensitive industries in the world.”
On the other hand, the industry itself continues to push for cleaner energy sources used in blockchain activities (both as part of social missions as well as regulatory restrictions).
These two factors contribute to innovations happening at every level of blockchain: from hardware (more efficient ASIC chips and mining rigs) to software (Ethereum transitioning away from PoW) to applications (various Layer 2 solutions).
In addition to this, there are also innovative approaches to making PoW more sustainable and environmentally friendly by using renewable energy to power mining, redirecting mining heat waste to power other processes, or repurposing waste energy from other processes for crypto mining.
The following examples are ways in which crypto miners are attempting to offset energy consumption and associated carbon emissions.
Providing heat to a city
MintGreen, a Bitcoin mining company, announced a partnership with Lonsdale Energy Corporation (LEC), a district heating utility owned by the City of North Vancouver, to add a new heat source to its energy system. According to Natural Gas Intelligence,
“MintGreen’s Digital Boilers are expected to prevent the release of 20,000 metric tons of GHG/MW compared to natural gas. Its digital boilers ‘recover more than 96% of the electricity used for Bitcoin mining in the form of heat energy that can be used to sustainably heat communities and service industrial processes.’”
Currently, LEC serves 100 commercial and residential properties by using heat pumps, solar panels, buildings waste heat and natural gas boilers. This pilot project could lead to expansion opportunities in the city and surrounding areas.
Accelerating whiskey’s aging process & making salt
Before committing to supplying heat to an entire city, MintGreen entered into a partnership with Shelter Point Distillery, a Vancouver-based label that makes whiskey, vodka and gin. This distillery adds heat to their barrels to accelerate the aging process for whiskey. Instead of using extra electricity for producing heat, MintGreen’s mining rig, called the “tumbler,” now supplies it.
MintGreen also formed a commercial partnership with Vancouver Island Sea Salt. It will use liquid immersion mining systems to heat large evaporation tanks for producing gourmet flake salt.
Powering greenhouses
Genesis Mining, a crypto mining company based in Sweden, is launching a pilot project to repurpose excess heat from mining by using it to heat greenhouses. Commenting on this potential, Mattias Vesterlund, Senior Researcher at RISE (Research Institutes of Sweden), said,
"A 1 MW data center would have the ability to strengthen the local self-sufficiency up to 8% with products that are competitive on the market."
Others are also experimenting with a similar concept, like the GreenMine Container in the Netherlands or Le Caveau à Légumes in Canada.
This type of innovation works both ways. Just as crypto mining can recycle waste heat to power a different operation, it can also use excess energy from other processes to power itself.
Rubber disposal
According to Jason Williams, co-founder of PRTI, in America alone there are 350 million wasted tires a year that need to be disposed of, with about 20% of them getting dumped into the environment. Williams developed and patented a process that heats up a tire, captures the gas from it, and converts the gas to liquid fuel, which gets used for the mining process. As reported on their website,
“In the first few months of operation, our Franklinton plant processed more than 15,000,000 pounds of waste rubber.”
Oil drilling
Drilling for oil produces byproducts like natural gas, which can leak. Typically, oil companies try to capture this gas and sell it, but that doesn’t work when there’s no pipeline or means to ship. In these situations, the natural gas would be wasted. Barbour’s Upstream portable mining rigs, metal shacks that are easily portable, are able to be placed in such locations and use the gas to mine crypto. According to CoinDesk,
“Over 250 of Upstream’s portable miners are in operation, from Texas to Wyoming to Alberta, cranking out bitcoin on the oil fields.”
Volcano emissions
El Salvador’s President, Nayib Bukele, is looking to use geothermal energy emitted from local volcanos to power Bitcoin mining facilities.
These are just a few examples of the developments happening in the crypto mining space. Focusing on just one aspect of the energy consumption conversation (how much electricity PoW uses) overlooks the innovation happening in the industry.