Some miners could be left without energy sources due to the fall in the price of oil. Some North America-based Bitcoin mining farms use the waste gas from oil-extracting companies.
Those North American Bitcoin miners that have established their businesses around fossil fuel extraction waste are excited rather than fearful about the oil market since the price of this commodity plunges to all-time lows.
To protect the environment, oil-extracting companies need to reduce their gas emissions. For that reason, some Bitcoin mining companies, such as Upstream Data in Canada, Crusoe Energy in Colorado, and DJ Bitwreck in Texas, are using excess gas as fuel for many Bitcoin mining devices, instead of burning it on immediately.
If oil markets collapse and stop these sources of power, it will be a problem for Bitcoin miners as they will not be able to take advantage of their waste gas.
When the price of Bitcoin drops drastically, as occurred last March, the mining of the first cryptocurrency can rapidly become unprofitable. Some mines prefer to close their operations rather than lose money. Only large industrial mining farms can withstand the lack of profits for months if the price of Bitcoin remains low.
Oil and Bitcoin Miners in Texas
A Bitcoin miner, working in Texas under the alias DJ Bitwreck, said that he is building new hardware too. His team, which has four co-founders, will require another five months to finish building the device.
DJ Bitwreck said that they have used about 40 kilowatts per year (kW/yr) in their proof-of-concept phase. This miner is seeking to add at least 1 megawatt of power from burning gas. He said that they want to find a site that will allow them to place a generator and a mining cabin as big as a shipping container at the eruption site. Most producers consider that burning gas is a problem, but their real problem is gold mining.
Great American Mining co-founder Marty Bent has run that type of Bitcoin operations in North Dakota since last December. He said that there would be no production of gas to be consumed if oil companies stopped operating. On the other hand, Bent estimated that in this site alone there are “hundreds” of megawatts of energy.
In DJ Bitwreck’s opinion, apart from negative oil prices, it does not make sense for miners to rely on any strategies. He thinks that it is better to wait until the Bitcoin halving occurs in May, which will reduce by half the reward that miners could receive for their work.
Waiting until June
The aforementioned initiatives will remain moderately profitable and lean, even though the price of Bitcoin does not increase in 2020.
However, it is necessary to see what will happen to most Bitcoin farms if both the price of oil and the price of Bitcoin remain low throughout the year.
DJ Bitwreck stated that they expect the waters to become murky, but they are excited about it. For that reason, they are not buying equipment at the moment as their objective is to collect equipment from other ships that capsize in rough water.
By Alexander Salazar
