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Blockstream and Macquarie collaborate to explore carbon-neutral alternatives for their joint investment in bitcoin mining.
Bitcoin infrastructure company Blockstream and financial group Macquarie will be partnering to pilot a Bitcoin mining facility and explore alternative carbon-neutral energy sources to power such operations. The partnership, announced in a press release sent to Bitcoin Magazine today, will join together Blockstream’s enterprise-grade bitcoin mining facilities with Macquarie’s knowledge in energy to achieve environmentally sustainable Bitcoin mining solutions.
“Macquarie’s experience and scale in traditional infrastructure investment, as well as commodity and energy markets, and Blockstream’s position as a leading Bitcoin miner and provider of Bitcoin-based technology solutions offers terrific potential,” said Dr. Adam Back, Blockstream CEO.
This initiative builds upon many of Blockstream’s previous building-block developments in the bitcoin mining ecosystem. The company, which operates mining and hosting facilities in Quebec, Canada, and Georgia, announced Blockstream Energy in August, a new service that allows renewable energy producers to increase energy production efficiency and sell surplus energy. The company also recently launched its new ASICs manufacturing arm in a merger with mining hardware manufacturing company Spondoolies.
Blockstream’s previous leap into researching and creating a 100% renewable energy bitcoin mine at scale saw its inception in a partnership with financial services company Square. Square would invest $5 million in the arrangement, and Blockstream would provide bitcoin mining infrastructure and management experience.
By collaborating with Macquarie, Blockstream expects to develop renewable power infrastructure to fulfill its vision of scaling this initiative to new sites in the future. The first pilot project with Macquarie will allow Blockstream’s experience in bitcoin mining and mining hardware hosting to leverage the financial group’s investments and expertise in energy to research and explore alternative solutions to make renewable bitcoin mining at scale viable.
Macquarie is a leading investor in renewable energy infrastructure, which, as of March 31, had $428.3 billion of assets under management and 44 gigawatts (GW) of generation under development, according to the release. The firm provides asset management, finance, banking, advisory, and risk and capital solutions across debt, equity, and commodities.
There are two energy revolutions currently underway that complement one another: the revolution in human energy use, as greener or more sustainable options become a priority in the light of climate change, and the Bitcoin revolution that is driving a whole new frontier in how energy is used to create value.
Solar power in particular seems like the cutting edge for renewable Bitcoin mining. Bitcoin industry stalwarts Blockstream and Square are constructing a multi-million-dollar solar-powered mining facility, for instance.
But it’s hard to know what percentage of the Bitcoin network’s overall hash rate is generated by solar power, though anecdotal evidence from solar developer Blake King of RES Holdings indicates that there are new solar projects “everywhere” in the U.S.
In a recent Compass Mining podcast, King noted that there really isn’t data available to determine exactly how much solar energy is available, but he’s hearing that power grid generation queues are full of new solar companies trying to get in.
“It’s huge,” he said. “There’s gigawatts of solar coming in everywhere.”
The latest Cambridge Centre For Alternative Finance energy data indicates that “a growing share of total electricity consumption originates from renewable energy sources such as hydro, solar, or wind power,” though, the center notes, that “the exact energy mix of the Bitcoin mining industry remains unknown… estimates diverge considerably, ranging from approximately 20% to 30% of the total energy mix to more than 70%”
As the share of solar-powered hash rate seems likely to grow, many see the potential for renewable energy use in Bitcoin mining as a virtuous cycle — one in which the unique incentives in Bitcoin mining, which propel operations to leverage the cheapest power possible, will encourage more operations worldwide to convert to renewable energy sources, like solar.
And as governments agree to reduce levels of carbon emissions and introduce additional incentives like investment tax credits, it’s possible that the share of mining operations using solar power will increase even more.
As Dan Frumkin, head of research and content for Braiins and Slush Pool, wrote recently, there’s the “the possibility for bitcoin to [incentivize] renewable energy development around the world by providing a means to monetize surplus energy which would otherwise be wasted.”
In an interview with Bitcoin Magazine, Frumkin said that there is no reliable data on where solar farms are located, but there are some likely homes.
“I think the whole Southwest is optimal for solar,” he said. “My home state of New Mexico gets about 300 days of sunshine per year and has plenty of barren desert landscapes. It also has lots of oil and gas production, so I think it would be a great place to try a solar and waste-gas hybrid operations to ensure uptime even when the sun isn’t shining.”
Blockstream and Square’s forthcoming joint venture will be located in the state of Georgia.
Meanwhile, the Solar Energies Industry Association has listed the top ten states for solar power based on the cumulative amount of solar capacity installed in Q1 2021.
Anecdotally, we also know that West Texas is a solar and wind powerhouse and a new favorite mecca for companies hoping to mine bitcoin.
In his written analysis, Frumkin noted that solar power may be considered green and renewable, but also that there are significant problems with solar, including the limits of sunlight hours. The below chart demonstrates the availability of solar compared to other energy sources:
In the recent Compass Mining podcast, Frumkin and Blake explained that there are a number of ways to fill in the hours without sunlight (also, those when it’s cloudy or there are dust storms) to make solar power use economical.
Some companies use a natural gas generator to fill in those gaps, leveraging an energy source that is relatively inexpensive but not renewable. Other miners have contracts or “power purchase agreements” (PPAs) with their local energy grids to purchase off-peak, inexpensive power through the night, often for as low as two cents per kilowatt hour. This may be power that would otherwise go unused.
The below chart shows the estimated relative price of different energy sources, per the International Renewable Energy Agency:
Most solar power companies use batteries to capture and store excess solar rays, and that works especially well for small operations. But it is not a solution for larger operations.
“A solar panel and battery system on somebody’s roof will work well to power a few miners with full uptime,” Frumkin told Bitcoin Magazine. “If the solar farm is much larger and meant to be supplying energy to the grid, then there is another source of demand for the power in those batteries and then it becomes complicated. This is the case that I analyzed here, where the battery power was reserved for the grid and the only power that could be used for mining was the surplus produced after meeting grid demand and filling the batteries. In that case, I don’t believe the risk/reward on mining is attractive.”
Although solar energy itself is considered “green” or renewable, the process of manufacturing solar panels often uses coal and produces toxic waste as a byproduct.
Most solar panels are manufactured in China in the Xinjiang region (which, until recently, was also a bitcoin mining epicenter) where there is abundant available coal energy.
“In my opinion it is legit criticism,” Frumkin said of the environmental drawbacks of solar panel manufacturing. “So much of the world’s solar panel production takes place in Xinjiang and is quite likely involving slave labor of the Uyghur ethnic minority people there, as well as the use of lots of coal power and toxic chemicals in the manufacturing process.”
As a result, the idea that solar power would actually be a “green” alternative for bitcoin mining might be a misconception.
“It’s still not accurate to portray solar as 100% clean either from an environmental or ethical standpoint,” Frumkin said. “Maybe the tradeoffs are worth it with all factors considered, but it’s rare to even see the negative factors mentioned in mainstream media.”
Blockstream has announced Blockstream Energy, a new service that allows energy producers to maximize energy production efficiency and sell surplus electricity.
Today, August 17, 2021, Blockstream announced their latest service, Blockstream Energy, which offers scalable energy demand to energy producers using Bitcoin’s proof of work (PoW), in a press release sent to Bitcoin Magazine.
This new service utilizes these self-contained and remotely operated mining facilities called modular mining units (MMUs) as featured in the picture above, which allows energy producers to maximize energy production efficiency and sell surplus electricity.
These plug-and-play MMUs are to be deployed at energy production facilities which allow for scalable and dynamically adjustable energy demand. MMUs can be very beneficial by playing multiple different roles such as optimizing energy utilization, balancing electric grids and improving carbon trading strategies. And because of their ISO-compliant dimensions, these units can ship around the world and between energy production sites with ease.
“For the first time, energy producers can control and scale demand to meet their supply. This incredibly powerful tool can be used to make existing electrical grids far more efficient while also significantly improving the economics of renewable energy projects,” explained Chris Cook, CIO and head of mining at Blockstream. “Looking ahead, we are very excited to leverage Bitcoin technology to accelerate renewables and anticipate this market to grow and remain coupled.”
Something that really makes this service unique is that you can access your MMU from anywhere in the world via the Blockstream satellite network. Since this service operates in even the most remote places on the planet, this brings new opportunities from previously unviable hydro and solar hotspots, in addition to any excess energy at sites isolated from civilian or commercial power infrastructure.
“Much of the world’s usable renewable sources are concentrated in remote locations where there is little local demand and not much surrounding infrastructure,” said Adam Back, CEO at Blockstream. “By combining Blockstream Energy with our network of satellites, these energy hotspots can be tapped into. We look forward to working with partners to identify some of these areas where stranded energy can be utilized for Bitcoin mining to further incentivize investment in renewables.”
This is one of the many announcements coming from Blockstream that aims to pursue alternative energy solutions, which includes a $5 million solar mine with Jack Dorsey’s Square as well as a partnership with energy infrastructure multinational Aker. All the above perfectly demonstrates how renewable energy can and will help drive clean Bitcoin energy adoption.
It is with no hyperbole that I say the media industry has it out for Bitcoin. Whether it be for the massive engagement to be extracted from the buzzing digital asset keyword or a legitimate opinion on bitcoin mining, it appears that media outlets cannot help but exaggerate and hyperbolize comments on bitcoin.
One recent example of this was the piece put out in regards to Greenidge Generation’s operations on Seneca Lake in New York.
Bitcoin Magazine’s Level 39 contributed an excellent piece that addressed the issues with this NBC article, and there were many.
Essentially, the NBC piece utilized a quote from a concerned citizen that was hyperbole.
What is particularly interesting is that there is no mention of Bitcoin in the infamous quote — almost as if the lake was simply being described as warm.
Of course, citizens have the right to be concerned about whatever they want, and there are indeed channels for voicing and acting on these concerns. However, as Level 39’s piece details, the actual warming of the lake as a result of the plant is quite literally nonexistent and there are multiple, complex factors the NBC article plainly ignores.
So, why would a media company publish a comment meant entirely as hyperbole in an attempt to frame a bitcoin mining plant in a negative light?
Any amount of carbon or environmental impact generated as a result of bitcoin is too much if you don’t believe it is a worthy utilization of energy.
But in order to develop an opinion of whether or not bitcoin is a worthy utilization of energy, one must understand bitcoin, while many media companies clearly do not.
An excellent piece by Croesus_BTC details why educated people commonly not only misunderstand bitcoin but decide to actively dislike it. Allen Farrington adds onto this idea, stating, “But the gist of it is that people whose profession or primary intellectual pursuits consist of ‘wordsmithery’, as Nozick calls it — competitively putting forward essentially verbal arguments in the hope of enacting influence — seem inclined to find unfair and unjust a dynamic in which this gets you nowhere.”
When reading this, the media immediately came to mind. The media utilizes words and phrases in a verbal argument format in the hopes of enacting influence, this time on your opinion of bitcoin and its environmental impact.
Upon reckoning with the idea that this is futile in regards to bitcoin, the media is left with utilizing hyperbole and quotations from people who do not understand bitcoin.
Indeed, one example of an environmental activist who doesn’t understand bitcoin who is often cited in the media, Yvonne Taylor, stated, “We simply cannot allow this ludicrous scheme of burning fossil fuels to make fake money in the midst of climate change.”
Such a disrespectful characterization of a global monetary network designed to empower unbanked people should have been illuminated as such; instead, it became national media coverage of bitcoin.
This same activist is now referenced in the Greenidge Seneca piece, where she states, “These crypto operations are looking for anywhere that has relatively cheap power in a relatively cool climate … It’s a horrible business model for all of New York state, the United States and for the planet.”
In a separate piece, Taylor reiterates, “We’re talking about burning more fossil fuels to make fake money in the middle of climate change, which we view as insane.”
Insane their view of Bitcoin may be, but infringing upon the freedom to execute computer code in order to solve mathematical problems that reward you with bitcoin is far more insane.
Bitcoin utilizes energy in the process of mining; but this energy usage is justified through its abilities to protect, store and transfer the wealth of an entire civilization. Indeed, in Hass McCook’s “A Comparison of Bitcoin’s Environmental Impact With That of Gold and Banking,” the reality of bitcoin’s environmental impact is unveiled to be far less than that of both industries. It’s understandable to want to minimize environmental impact. The single most important way we can do this is to adopt a monetary standard which incentivizes long-term planning, coordination and saving.
The environmental impact of bitcoin has been proven to be negligible in comparison to global greenhouse gas emissions. So, regardless of how many times critics refer to bitcoin as “fake money,” the core of their view that it impacts climate change is categorically false and, “the equivalent of removing 2.25 drops from a one gallon jug, warming those drops by about 7 degrees Fahrenheit, adding them back to the jug each day and then claiming that they are causing the jug to feel too warm.”
We can characterize the media’s representation of Bitcoin as a misunderstanding, in the same way that telling a police officer you didn’t know it was against the law to drink and drive is a misunderstanding.
The media deliberately misleads people in regards to the environmental impacts of bitcoin because of their lack of understanding. Bitcoin Magazine never reports on ideas or topics we don’t understand fully — these media outlets cannot say the same.
An old hydro-power station in the U.S. has started mining bitcoin to make three times as much money as selling the energy.
Bitcoin is helping increase the profitability of one of the oldest hydro-power stations in the U.S., the Mechanicville plant, as reported by Times Union. After decades of court fights, unused antique machinery, and plenty of restorations, the plant is now back at total capacity, and it is using part of that to mine bitcoin.
“We think this is the oldest renewable energy facility in the world that’s still running,” said Jim Besha Sr., CEO of Albany Engineering Corp., which owns the Mechanicville plant. “We can actually make more money with bitcoin than selling the electricity to National Grid.”
Albany Engineering got involved with the plant after National Grid asked the company to refurbish and operate the facilities in 1986, which were founded on an antique structure. The two corporations then signed a contract in which National Grid would lease the station to Albany and buy the power for 40 years, below market price.
Besha swiftly started repairing the plant and applied for an independent license to operate it, which was only conceded seven years later. Besha would later learn that, in the meantime, National Grid changed its original plans and claimed it would not honor the contract. Besha sued National Grid, and it took ten years to settle.
During the dispute, the plant began to fall apart as the National Grid refused to buy power, and eventually, Albany couldn’t run it anymore. Substantial damage was made, with part of the building having flooded once and a generator catching fire another time. But after the settlement, National Grid agreed to give up the plant, help pay for repairs, and buy its energy at the market rate.
The plant is now back at full capacity, generating power and selling it at market rate to National Grid at 3 cents per kilowatt-hour. Additionally, the ancient facility is currently experimenting with bitcoin mining to increase its profit margins, which allows it to make three times as much money as just selling the energy.
“It’s the best (type of bitcoin mining) because we’re using renewable energy,” Besha said. “We’re just doing it on the side, experimenting with it. We’re buying used servers.”
Furthermore, the Mechanicville hydroelectric plant has now been nominated for landmark status in three different types of engineering: civil, electrical, and mechanical. That, along with the plant’s listing on the National Register of Historic Places and its increased profitability through bitcoin mining, is set to potentially keep the plant working for centuries to come.
The often cited “issue” in Bitcoin is misunderstood and misrepresented.
Recently there has been a deluge of headlines about the environmental impact of mining bitcoin. Nearly every article, tweet, video, etc, cites Digiconomist and/or Cambridge as their primary evidence and says some version(s) of the following statements;
“Bitcoin consumes more electricity than Argentina/Kazakhstan.”
“Bitcoin’s electricity consumption as a country ranks in the top 30 globally.”
Comparing Bitcoin to countries and ranking them does a great job of making people feel that Bitcoin is not only one of the leading sources of emissions already, but is truly an outsized problem compared to the nearly 200 countries on the planet.
This comparison is almost always combined with the universal knowledge of Bitcoin’s historical and exponential price-performance leaving the reader with a powerful and unmistakable impression, i.e., that if Bitcoin was to be left unregulated it would ruin the planet with its exponential growth. A sentiment many authors are happy to state explicitly.
There is plenty to say about the methodology and the limitations of these models (and will be the subject of a later piece). However, taking their own data at full value, the environmental impact of Bitcoin mining is completely immaterial.
Comparing the annual emissions output from Digiconomist with CO2 Emissions data from Our World In Data, we find that Bitcoin’s global share of emissions of approximately 47 million tons of CO2 is only about 0.13% of the global annual total out of roughly 37 billion tons today. This is the same data point as used above but contextualized as any global problem should be, within the context of the whole world. As such it paints a radically different image.
It is important to note that these are the calculated emissions for Bitcoin now, at the largest that the Bitcoin network has ever been. While it is impossible to know the exact number, discounting Bitcoin’s exponential growth since 2009 will likely further reduce the average yearly emissions Bitcoin has been responsible for since 2009 by more than half.
Bitcoin has barely been around for 12 years. The data on emissions relating to climate change is measured cumulatively and goes back 270 years to 1750. That’s 21 times longer than Bitcoin has existed. As no one can be 100% sure of Bitcoin’s true impact since 2009, we take the overly conservative approach and project Bitcoin’s current share of global emissions back to the network’s inception and chart it historically with the cumulative amount of emissions. Taking this into account Bitcoin’s share of measured global emissions to date becomes even smaller, approximately 0.028% using this highly conservative approach.
It is important to note the scales of these charts. As Bitcoin’s share of the measured global emissions is so infinitesimally small it is not possible to render any normal size chart that accurately represents Bitcoin’s share of measured global emissions to date. Such a chart would be too small to be visible to the human eye.
Finally, there is also a small provision with the Our World In Data annual CO2 emissions. It only measures CO2 emissions from the burning of fossil fuels for energy and cement production. Land-use change is not included. As energy and cement account for only about 76.2% of the global energy consumption, we need to discount 24%, meaning Bitcoin’s current global share of measured emissions is around only0.098%, less than one-tenth of 1%.
It is abundantly clear that climate change was around before Bitcoin.
Bitcoin didn’t cause climate change. Does Bitcoin have emissions? Yes, all things do. But its emissions as a share of the global total are completely immaterial.
If you are sincere about reducing emissions, you must also want to reduce them in such a way that you get the best blend of the most amount of emissions reduced, for the lowest cost and at the fastest rate possible. The basic economic principle of marginal utility makes it clear that to reduce Bitcoin’s small amount of emissions down to zero, would require an inordinate amount of cash and effort per unit of reduction. There are however numerous industries where the same amount of capital and effort applied, would have a significantly greater and measurable reduction in emissions due to their existing scale. If your goal is reducing emissions, Bitcoin mining is one of the least effective and meaningful targets you could have.
It should be clear at this point that “Bitcoin’s climate change problem” has nothing to do with emissions and everything to do with trying to build support and justification to regulate the freest market in the world, Bitcoin mining.
This is a guest post by Ben Gagnon. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.
The bitcoin mining company will introduce a second facility located in South Carolina, a report outlines.
According to a press release, Greenidge Generations Holdings, Inc. intends to establish a second bitcoin mining operation in South Carolina. The facility will be entirely carbon neutral.
“The site, a retired printing plant, previously drew approximately 80MW of power and has expansion potential beyond that capacity,” states the release.
The move contributes to a growing trend of increasing investment in renewable energy, a positive in terms of the public perception of bitcoin mining.
“Approximately two-thirds of the electricity at the site is sourced from zero-carbon sources such as nuclear power, making it an attractive location for Greenidge,” according to the release. It goes on to state, “Greenidge has committed to offsetting the operation’s remaining carbon footprint, building on its record in New York State of operating a fully carbon neutral mining business.”
Such innovation also comes on the heels of a mass migration of hashrate from China, a notoriously “dirty” bitcoin mining center.
Coupling such industry orientation with geopolitics that supports the increasing use of renewables in bitcoin mining creates great potential for clean energy usage in the industry.
“This is an important step in Greenidge’s strategy to build upon our unique expertise in environmentally sound bitcoin mining at additional locations across the country,” CEO of Greenidge Jeff Kirt said on the development.
Such actions stand to rectify the perspective of environmental critics in regards to the mining of bitcoin.