Crypto-Mining Advocates: In fact, we’re not terrible for the environment

A blockchain policy event in Washington featured a pitch for cryptocurrency mining painted in shades of green — not green like in US fiat currency, but like green.

The reputation of Bitcoin mining might as well be weighed down by chunks of coal. It uses so much electricity that mining companies have reopened coal-fired power plants(Opens in a new window) to feed it. But speakers at the Chamber of Digital Commerce’s DC Blockchain Summit made the case for enlightened mining, based on and boosting renewable energy.

“We are able to contribute positively to the stability of the network,” said Brian Morgenstern, public policy manager for the mining company. Riot platforms(Opens in a new window). Citing the abundant wind and solar power for its Rockdale, Texas facility, he said Riot makes sure it’s not wasted during off-peak hours: “We’ll buy that power when there’s perhaps a consumer would not have otherwise.”

Riot mining facility in Rockdale, Texas. (Courtesy Riot)

Texas has one of the highest shares of renewable electricity generation in the United States.wind, solar and hydro now collectively reach 40.1%(Opens in a new window). However, gas still accounts for 41.8% of the total. Riot didn’t respond to a question about the types of energy at its Texas facility, but the company said in a September 2022 letter(Opens in a new window) to members of the House Energy and Commerce Committee that he cannot choose generation sources on the Texas grid.

Morgensten pointed out that when demand increases, Riot quickly idles its mining rigs: “We are able to shut down almost at any time.”

The Colorado-based company has financial incentives for being so polite: The Electric Reliability Council of Texas (ERCOT), which operates the Texas electric grid, offers “demand response” rebates to industrial customers who reduce their use. Last July, Riot made more money(Opens in a new window) of these discounts than Bitcoin mining.

A separate panel of three other mining companies added variations on this theme. Matthew Schultz, Executive Chairman of CleanSpark(Opens in a new window)said mining-inflated demand rewards utilities for building additional renewable capacity: “Bitcoin is really the perfect solution to that, in that you can supercharge production, and we can buy that excess capacity.”

Henderson, Nevada-based CleanSpark reports that 94% of the energy used(Opens in a new window) in its 2022 fiscal year was carbon-free. Spokeswoman Eleni Stylianou said this includes renewable energy credits purchased through Georgia Power’s Simple Solar Program(Opens in a new window).

Gabriel Ibghy, General Councilor of Hive Blockchain Technologies(Opens in a new window), said his company provides “demand response as a service,” automatically shutting down mining rigs when demand increases. “We’re integrated with the network operator, so it’s completely automatic, and we get paid for it.”

Installation of Hive blockchain infrastructure in Iceland (Credit: Hive)

Vancouver-based Hive has set up facilities in Canada, Iceland and Sweden because it can tap into 100% renewable energy at each location. Ibghy said Hive also buys off-peak electricity that would otherwise be wasted, “making utilities a lot of money by monetizing an underutilized resource.”

Hive has also found customers for the heat by-product of its mining facilities. In Sweden, for example, a greenhouse will be heated next door which can reduce the country’s carbon footprint by requiring less food imports: “There will be no shipment of cucumbers and tomatoes from Spain to the north from Sweden.

Fred Thiel, President and CEO of Marathon Digital Backgrounds(Opens in a new window), said the rural locations of many mining facilities can support the necessary construction of transmission lines. Marathon, based in Fort Lauderdale, is a recent convert to green mining, announcement last April(Opens in a new window) that it would switch to renewable energy. It’s been since left a Montana coal plant(Opens in a new window) which he helped relaunch in 2020.

A April 2021 Report(Opens in a new window) of energy consultancy Wood Mackenzie endorsed the concept of sustainability-conscious cryptocurrency mining, saying it could function as “a highly predictable and scalable demand response asset” and could “supply demand additional cheap and underutilized electricity generated by independent power producers and utilities”. .”

Cryptocurrency advocates claim that most mining already runs on renewable energy. A survey by the Bitcoin Mining Council, a trade group that claims to represent 48.4% of the global industry, found that in the fourth quarter of 2022, 63.8% of the electricity used for mining came from sustainable sources.(Opens in a new window) A tracker run by Cambridge University’s Center for Alternative Finance, however, places the share of renewables much lower: 37.6%, including nuclear(Opens in a new window).

Either number is better than the share of renewables in overall electricity production in the United States.21.5% in 2022(Opens in a new window), according to the government’s Energy Information Administration. But bad cryptocurrency actors can look extremely bad when they bring mothballed coal-fired power plants back online, as private equity firm Atlas Holdings has done in upstate New York. , with unpleasant environmental consequences(Opens in a new window).

This led New York to pass a law imposing a two-year waiting period on new mining facilities powered by fossil fuels. And at least a year ago at the Blockchain Summit, speakers Sen. Steve Daines (R-Mont.) and Michael Saylor, then CEO of MicroStrategy, spoke out against the bill. as an intrusion into free enterprise(Opens in a new window).