Shortly, China-based Bitcoin miners could migrate to other places. In recent years, the oil industry has discarded billions of cubic meters of natural gas.
The upcoming event that reduces the reward of Bitcoin miners by half and the drop of the oil market could be decisive in drawing a new map in the ecosystem. In this new situation, Bitcoin mining could be conquering a territory with the use of residual natural gas.
Regarding the state of Bitcoin mining, Jan Čapek, Co-CEO of Braiins, said that people complain about miners, claiming that they waste energy. However, they are seeking unused energy sources that could otherwise be wasted and they are willing to pay for it or use it in some way.
According to data from the Global Gas Flaring Reduction Partnership (GGFR), the oil industry burned around 141 billion cubic meters of natural gas in 2017. These figures began to be noticeably drastic in 2012 when the amount was estimated at 160 billion cubic meters. Taking into account the consumption of natural gas in the USA, this is equivalent to 25% and 30% of the consumption in the European Union.
Bitcoin Mining with Natural Gas
Jan Čapek suggests that Bitcoin miners will possibly start moving to those natural gas sources soon, an opinion that is already widespread in the ecosystem.
However, if oil companies seek to continue extracting fuel, they would have to burn natural gas in some way. At least, they could use it in a way that can generate profits, which creates an opportunity for natural gas-powered Bitcoin mining facilities. Čapek wonders about the resulting balance sheet once these facilities are equipped with gas turbines. Given that this is not low-end equipment, it would cost a lot of money.
The models that Bitcoin mining startups using natural gas implement could provide a solution in this situation. Some of those new companies include Upstream Data (from Canada) and Crusoe Energy (from the USA). Even independent miners like DJ Bitwreck, who operates in Texas, are using natural gas.
For instance, Upstream Data aims to attract oil companies for the rental and installation of their mining equipment. On his part, DJ Bitwreck seems to be buying equipment that others no longer use to strengthen his infrastructure.
However, the use of natural gas as an alternative to hydroelectric sources seems to depend on the price of Bitcoin. There are expectations about the incidences of the upcoming Bitcoin halving, which will reduce the reward miners by half. Besides, oil production levels are seriously threatened by the Covid-19 crisis. To understand this better, global extraction increased by 50% in 2017, compared to previous years. In other words, many companies could be disposing of a lot of natural gas shortly.
It is difficult to determine the effects of using residual natural gas for Bitcoin mining on the levels of energy expenditure on the planet. However, data on the burning of natural gas indicate that about 350 million tons of CO2 are released into the atmosphere as a result of the oil extraction process. This situation also causes the emission of unburned methane and black carbon, extremely harmful to the environment.
By Willmen Blanco