Pulling resources out of the ground isn’t the only type of mining that is energy intensive – so too is Bitcoin mining.
Bitcoin is a type of digital cryptocurrency generated by individuals and companies using computing power to perform complex calculations; the solving of which provides a reward of the currency.
Among its appeals is it’s a currency that offers anonymity, low transaction fees, it isn’t controlled by a central authority and governments and financial institutions can’t interfere with transactions, nor freeze accounts.
In July 2010, one bitcoin (1 BTC) had a value of around USD $0.08. After reaching a value as high as $1,150 per BTC in late 2013, the price dropped; getting as low as $213 in 2015. This year has seen a resurgence, with value in a range of approximately $450 – $750.
Given the nature of the algorithm involved, apparently the maximum number of bitcoin that will ever be available is 21 million BTC. Today, approximately 16 million have already been mined. The race is on to mine those remaining; with the added lure of much higher values over time.
This writer doesn’t profess to be any sort of expert on the subject of bitcoin, but it seems the more that are mined, the harder it is to mine for remaining bitcoin – a little like physical resources.
For example, as an oil resource depletes, more energy and effort is expended in getting the remaining oil in that reserve out of the ground; until the point it is no longer financially viable. Depending on the value of oil, it still may be worthwhile returning to that reserve at a later date to squeeze the final barrels out of it – but using even more energy in the process to do so.
According to Guy Lane from BitCarbon:
“Bitcoins were specifically designed to gobble up increasingly vast amounts of computational effort, resulting in spiralling electricity consumption.”
As bitcoin has evolved, so too have the computer systems used to “mine” it. Where once standard personal computer could generate bitcoin, now huge amounts of computing power are required to make it a worthwhile exercise.
The amount of computing power and accompanying electricity consumption has raised concern about bitcoin related carbon emissions, as the cheapest electricity has traditionally been associated with coal-fired power generation.
One of the world’s most energy-intensive data centers will soon be constructed and its major function will be to mine for bitcoin.
Beijing-based Bitmain Technologies Limited has planned a data center in China’s North Western province of Xinjiang that will demand up to a staggering 135 MW of power. This could be a carbon emissions nightmare if not for the wind and solar energy that will be the main energy source.
“We have seen that most data centers in the mining industry are wasting considerable money or other resources,” said Bitmain’s Co-CEO Jihan Wu, ” We want to provide a more professional and cost-saving example to the industry.”
It’s not clear from the company’s state how much, if any, of that supply will be on-site – but it appears they’ll have plenty of roof space for solar panels to self-generate at least a portion of the demand.
Aside from the warm and fuzzy green aspect, it’s actually making good financial sense for Bitcoin miners to consider commercial solar power and other renewable sources; with wind and solar power increasingly able to supply electricity cheaper than can be sourced from the mains grid.
If you’re interested in gaining a better grasp of bitcoin; here’s a couple of primers that even this writer is managing to get his head around:
If you find yourself bitten by the bitcoin bug; when you’re ready to start building your bitcoin mining data center, don’t forget to give Energy Matters’ commercial solar team a call :).
Top Right Image Credit: BigStock