Bitcoin miners are assisting oil firms in reducing flaring by using natural gas generators that would otherwise be burned into the atmosphere.
The amount of influence Bitcoin (BTC) mining has on the environment is a contentious topic in the blockchain world that comes up from time to time. Elon Musk, the CEO of Tesla, shocked the cryptocurrency world last year when he announced that his company will no longer take Bitcoin, citing “rapidly expanding use of fossil fuels for Bitcoin mining and transactions.” Despite the extensive usage of coal, oil, and gas for Bitcoin mining, the network accounts for less than 0.08 percent of global CO2 production, according to a recent research published by CoinShares.
Kristian Csepcsar, chief marketing officer of Slush Pool, the oldest Bitcoin mining pool, gave insight into what he feels are current misconceptions about Bitcoin mining’s environmental impact. When asked about the disadvantages of mining Bitcoin with oil and gas-derived electricity, Csepcsar argues there are more than meets the eye:
Because it’s not cost-effective to do anything with the gas, we’re physically burning it into the atmosphere [Flaring]. Instead, we may put it in a motor that generates electricity, which we can then use to mine Bitcoin.
Due to a lack of pipeline infrastructure to get it to market, flaring is the process of burning excess natural gas during oil extraction. Bitcoin miners in the United States and Canada have recently discovered ingenious ways to use natural gas to generate power rather than simply burning it into the atmosphere, so resolving a key environmental issue.
However, Csepcsar remains suspicious about certain renewable Bitcoin mining sources, referring to solar energy as “commercial babble.”
We published research on our blog indicating that we are not major supporters of solar mining; when you analyse the profitability, it’s not so great; it’s a difficult industry.
Cespcsar goes on to say that China produces roughly 70% of all solar panels and that there hasn’t been much research done on the environmental impact of the manufacturing process:
They produce a lot of hazardous chemicals in the process of making them. And no one ever mentions it. Everyone believes that solar panels grow on trees and are subsequently exposed to the sun. No, the process of making them is gruelling.
Finally, Slush Pool does not have any information about the energy source that its Bitcoin miners use. Cespcsar delivered an unexpected response when asked why this is the case: (but potentially faithful to the decentralisation and privacy philosophy)
As a pool operator, we don’t want to think about that. To get those data, we’d have to verify our miners’ identities, do operations audits, or even filter transactions [for analytics]. That is not the ethos we wish to maintain.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.