Blog – Crypto Mining Asset Manager | Neo Mines

What’s Next in Bitcoin Mining?

admin — Thu, 19 May 2022 09:03:39 +0000

As a digital asset, Bitcoin has enjoyed remarkable growth since Satoshi Nakamoto created the Genesis Blockback in 2009. From an ambitious concept aimed at decentralizing finance, Bitcoin has become a sought-after digital asset that heads the trillion-dollar crypto market.

Inevitably, the popularity of Bitcoin led to the growth of the Bitcoin mining industry – a market expected to be worth $5.3 billion by 2028.

With a projected compound annual growth rate (CAGR) of 28.5%, Bitcoin mining has attracted institutional money and institution-grade players, with companies lining up to reap the rewards of processing transactions and completing blocks on the blockchain.

Bitcoin mining company Core Scientific today boasts a market capitalization of $1.29 billion, while Marathon Digital Holdings holds a market cap of $1.18 billion. Similarly, shareholders of Hive Blockchain Technologies (CVE: HIVE) have enjoyed 609% growth over the past 5 years.

Even with the recent economic downturn and bearish state of the larger crypto market, the Bitcoin mining industry is displaying signs of resilience.

Growth in the face of adversity

According to data produced by full-stack Bitcoin mining solutions expert Braiiins, a new record high was set for Bitcoin mining difficulty for the sixth time this year, reaching 31.25 trillion.

Mining difficulty increases as the computing power of the Bitcoin network – also known as hash power – increases. Hashing power is increased through the introduction of newer, more powerful Application-Specific Integrated Circuit (ASIC) machines to replace older ones, or through the sheer increase in volume of computers connected to the network.

As Bitcoin mining companies continue to plug in more computers to process transactions on the blockchain, the chances of being rewarded for successfully processing a single block becomes increasingly slim for each competing miner, which translates to rising mining difficulty.

The new record highs in mining difficulty set this year reflect the steady, resilient, and bullish growth of the Bitcoin mining industry, even with the crypto market going through a tumultuous period.

One phenomenon that is seen as a potential growth driver is the emergence of home and small-scale miners. The crypto bull market saw the launch of retail-focused products and services that enabled micro-scale Bitcoin mining. Now, a quick search of social media platforms would reveal a growing number of posts pertaining to at-home mining rigs built by aspiring crypto entrepreneurs.

Large mining firms are also actively expanding their capacities by building out new farms. Riot Blockchain, one of the world’s largest Bitcoin mining companies, officially announced in April the initiation of a 1-gigawatt development in Navarro Country, Texas to expand its mining and hosting capabilities. The company looks to pour in $333 million into the first phase of the expansion plan, which will include land acquisition, site preparation, transmission construction, and substation development.

Meanwhile, on the other side of the pond, it has been revealed that some miners in China have managed to continue operations despite Beijing’s orders of a nationwide crypto ban.

Once the world leader in Bitcoin mining, China’s hash power dropped to zero in July and August 2021 in the wake of a government sanction against crypto mining. This resulted in the mass exodus and dispersal of China-based miners into other countries such as the United States and Kazakhstan, as well as the consequent fall of China as a global Bitcoin mining powerhouse.

However, recent reports indicate that some miners have managed to keep their operations under the radar and are now taking care to work around the blanket ban. As of today, China has managed to re-establish a semblance of its former dominance in the space, rebounding to second behind the United States in total hash rate at 21.11% of the global market share.

Institutional adoption marches on

On the investment front, the growth of Bitcoin as an asset class has also led to a number of significant developments and movements, not only in finance and investment but also in policy.

For example, in the absence of a hotly anticipated spot Bitcoin ETF, investment firms such as Grayscale Investments, LLC and Valkyrie Investments have moved forward with the creation of sophisticated institutional-grade investment products such as the Grayscale Bitcoin Trust (GBTC) and the Valkyrie Bitcoin Strategy ETF (Nasdaq: BTF) to give investors alternative exposure to Bitcoin.

Launched by Grayscale Investments, GBTC is one of the pioneering securities that solely derive value from the price of BTC. Available to investors only through OTC trading, the Trust is a financial instrument that makes it possible to trade shares that are linked to the current price of Bitcoin, without holding the crypto itself in a crypto wallet.

On the other hand, the BTF is an exchange traded fund that invests primarily in Bitcoin futures contracts, creating a secondary market for investors to gain further exposure to the crypto market.

The approval of financial instruments such as these by the U.S. Securities and Exchange Commission is considered a major milestone in crypto, as these products are likely to draw in institutional investors that have remained on the fence when it comes to the cryptocurrency asset class.

However, the lack of a spot Bitcoin ETF in the U.S. continues to be a significant pain point for investors with interest in the space, especially since countries such as Canada and Australia have already launched similar products in their respective markets.

In fact, Canada has recently seen the Purpose Bitcoin ETF – the world’s first exchange traded fund backed by physical settled Bitcoin – make its one-year anniversary after launching on the Toronto Stock Exchange on the 18^th of February last year. As the first of its kind in the world, the ETF proved to be immensely popular amongst investors, hauling $1 billion in assets under management (AUM) within a month of its launch. Today, the fund has approximately $1.5 billion in assets.

Despite such a successful precedent, the SEC has shutdown all applications for a spot Bitcoin ETF thus far, citing asset volatility and potential for market manipulation as reasons. Furthermore, SEC Chair Gary Gensler has indicated that a spot BTC ETF will fail to be a reality until a robust regulatory framework is in place around crypto exchanges.

While without a direct link to mining activities in general, the acceptance and adoption of financial products such as these serve as signals that drive the Bitcoin bull cycle.

As the first Bitcoin futures ETF in the U.S., the launch of the ProShares Bitcoin Strategy ETF was closely followed by a 4% spike in Bitcoin price to $64,2016.51 and another hike to a previous all-time high of $66,900 a few days later.

Upward price movements such as these following motions of institutional crypto adoption increase the profitability of ASICS, which in turn impact the economics of Bitcoin mining. When the reward for mining increases, the revenue generation capacity of Bitcoin miners also increases.

On the side of policy, one significant development is El Salvador’s official adoption of Bitcoin as legal tender on the 7^th of September 2021. Proposed by incumbent president Nayib Bukele, the country legislated the adoption of Bitcoin to address inefficiencies in international remittances, open the financial world to the unbanked people, and reduce the country’s reliance on the U.S. dollar

Under the legislation, the El Salvador government authorizes the use of Bitcoin to discharge debts, pay for goods or services, fulfil tax obligations and other such functions fulfilled by legal tender.

This is considered a landmark moment for Bitcoin, as it immediately puts the cryptocurrency to the test. Financial authorities around the world are closely watching the country’s actions to understand the impact of this decision and the consequent adjustments that might be necessitated moving forward.

More recently, President Bukele hosted an annual meeting of the Alliance for Financial Inclusion, where he promoted the adoption and use of Bitcoin to 32 central banks and 12 financial officials in emerging economies on the back of the benefits that his country has enjoyed from their own Bitcoin adoption.

Even with push back from the International Monetary Fund, President Bukele has remained unperturbed and unwavering in his support for Bitcoin. And if Bitcoin weathers the challenges and succeeds as a viable legal tender, it can be seen as a success for both El Salvador and the leading cryptocurrency.

On one hand, El Salvador can be forever enshrined in history as a first mover and the first nation to ever adopt Bitcoin as legal tender. On the other hand, it could also fuel even further the bullish case for Bitcoin, and concretely validate the economic viability of the Bitcoin mining industry.

Making Bitcoin Mining Sustainable

Bitcoin mining consumes half a percentage point of all the electricity consumption in the world. According to the Q1 2022 report of Bitcoin Mining Council, the total annual power consumption of Bitcoin is currently 247 TWh. Thus, putting it on par with the usage of some countries like Argentina (121 TWh), the Netherlands (108.8 TWh), and the United Arab Emirates (113.20 TWh).

In the past five years, Bitcoin energy consumption has grown tremendously and is estimated to rise rapidly up to 706 TWh by 2027, according to NYDIG, a bitcoin financial services company. This massive computing power required to mine bitcoins leads to criticism about its environmental footprint. The concern was also exacerbated by the fact that two-thirds of the energy used by these miners was from coal.

Consequently, in 2021, a group of more than 150 crypto companies signed the Crypto Climate Accord. The crypto industry took a big step to fully transition all blockchains to 100% renewable energy by 2025, fully decarbonize and achieve net-zero emissions from electricity by 2030 and full net-zero by 2040.

Solutions are being implemented with the increasing number of eco-friendly mining facilities already operating at a massive scale. A recent report from Blockchain Mining Council (BMC)posits that bitcoin mining has rapidly moved away from non-renewable resources in the past years. Accordingly, the crypto mining industry recorded a 59% increase in the year-on-year utilization of sustainable energy sources to mine bitcoins. BMC members are using 64.6% sustainable energy mix, which comes from renewable sources like hydro, wind, solar, nuclear, geothermal, and carbon generation with carbon offsets.

The survey results indicate that the green energy mix for the global Bitcoin mining industry stands at 58.4% in Q1 of 2022, significantly higher compared to the estimated figure of 36.8% in Q1 of the previous year. The report also shows an increase in the energy efficiency of mining operators by 63% from last year and 5,814% compared to eight years ago. Bitcoin mining power consumption has declined by 23% in the previous year, while the hash rate has increased by 23%, from 164.9 to 202.1.

This trend is expected to continue as more and more mining companies seek ideal locations to relocate and expand their mining company. Immediately after China banned bitcoin mining, crypto mining companies relocated to countries like the United States, Iceland, and Norway. These are excellent locations for bitcoin mining companies because of the accessibility of renewal energy sources. Companies can also take advantage of the competitive rate of renewable energy to power their machines and low temperatures in the countries to help reduce their operational costs by cooling the computer servers naturally.

“Prioritizing some form of clean energy to power the majority of operations is, in the long term, a sustainable model for successful mining operations.”

Mas Nakachi, Managing Director, XBTO Digital

Technological Developments in Bitcoin Mining

Bitcoin mining is the process by which new bitcoins are entered into circulation. It involves validating cryptocurrency transactions on a blockchain network and adding them to a distributed ledger. It is performed using sophisticated hardware that solves extremely complex computational math problems and algorithms to authenticate and protect digital transactions, from which the first computer to find the solution to the problem receives the next block of bitcoins, and the process begins again.

From the traditional GPU-based systems designed to perform multiple functions, bitcoin mining companies are now using application-specific integrated circuit (ASIC) miners – a more specialized and efficient crypto mining hardware product explicitly designed for mining.

Hardware companies continuously innovate and produce advanced and high-end ASIC miners to cater to the increasing demand of bitcoin mining companies. According to Geekflare, below are some of the newest and most advanced models of ASIC in the market.

- Antminer S9 Bitcoin Miner – The Antminer S9 is Bitmain’s latest ASIC miner in a long line of ASIC miners. The S9 has a maximum hash rate of 13.5 TH/s and is set to mine Bitcoin. When operating at top performance, the Antminer S9 utilizes 1323W of power, making it one of the most energy-efficient Bitcoin mining devices on the market.
- QIO TECH Bitmain Antminer S19j pro 100th/s – QIO Antiminer has a maximum hash rate of 100TH and employs the SHA-256 algorithm. The hash rate is so high that it virtually ensures a large profit margin. This type of machine uses a lot of power, up to 2950 watts.
- Nebra Outdoor Helium Hotspot Miner HNT Crypto 915 MHz US – It is the world’s first helium-powered, 915 MHz processor in a compact form factor. It is powered by a cutting-edge ASIC and can mine a range of cryptocurrencies like Bitcoin, Ethereum, and Litecoin.
- Bitcoin Miner Machine Whatsminer M30S / M31S+ – The M30S and M31S have an industry-leading energy efficiency rating of 99.9%, allowing them to harness the least amount of energy possible to optimize revenue. The M30S was one of the first miners to introduce the 3x joules per Terahash generating. It has a maximum Terahash of 88 TH/s and power consumption of 3344W, with a hash rate variation of less than 5% and a power consumption fluctuation of less than 10%.
- Canaan AvalonMiner 1246 85TH/S Bitcoin Miner – Canaan’s flagship product AvalonMiner 1246 employs an SHA-256 designed for the intermediate to advanced user and built for the most profitable and efficient cryptocurrency mining. It has the ability to mine SHA-256 at a rate of 85TH/s, making it most cost-effective option for small- to medium-scale mining operations.

It is a globally acknowledged fact that Bitcoin mining is an energy-intensive and heat-generating process. As a result, mining companies are constantly looking for methods to cool their mining equipment without compromising productivity and profit.

To prevent overheating, companies are using air cooling and immersion cooling technology. The traditional and simple method of managing the heating and cooling of mining rigs is air cooling, which involves using ventilation fans and atmospheric air to regulate the temperature of mining equipment. Heat is dissipated by increasing the flow of air over the mining rig. To increase the effectiveness of air cooling, energy-sapping refrigeration components like chillers and air handlers are often used.

A more advanced and rapidly evolving technique for cooling mining rigs is immersion cooling. It is a practice of completely submerging or immerging the mining rig in a thermally conductive liquid with greater insulating properties than ordinary air. This method is very effective, with 40% of heat recaptured and used to power the mining rig; heat rejection increases ten times compared with air cooling.

Future Outlook for Bitcoin

As an increasing number of institutions and mainstream companies across multiple industries are embracing bitcoin, the demand for this type of digital currency also increases. New technologies in bitcoin mining are also expected to be introduced in the following years, making it more efficient and less energy intensive.

Clearer regulations and guidelines to make cryptocurrency safer for investors across various jurisdictions are also set to be placed in the coming years. Furthermore, growth in sustainable energy usage in bitcoin mining is anticipated due to increasing environmental consciousness, political pressure, and an eye on the bottom line.

As bitcoin mining speeds up its transition to becoming a zero-carbon future, it also presents an opportunity to accelerate the global energy transition to renewablesby sourcing energy from renewable sources and utilizing surplus renewable energy supplies. This could have ripple effects that extend well beyond bitcoin mining onto power grid systems around the globe.

Making the Case: The Greening of Bitcoin Mining

admin — Sun, 19 Sep 2021 13:16:00 +0000

Vitally reliant on constant and stable electricity, the digital mining industry can benefit greatly from the integration of renewable energy and sustainable technology.

Approaching a market cap of USD 2.24 trillion, the cryptocurrency space has become too large to ignore. Consequently, the explosion of cryptocurrency investment has brought the spotlight to its underlying mining industry. And with increased interest comes more scrutiny. In the case of Bitcoin, critics have come down on its energy consumption. Months after their record-setting purchase of BTC worth USD 1.5 billion and an announcement of plans to accept Bitcoin as payment, Tesla and Elon Musk pulled back on their stance citing climate concerns. This has highlighted the potential of an uncanny tandem in the crypto space – digital mining and sustainable energy technology.

The Potential for Crypto Mining

Sustainable technology and digital mining both stand to gain from a symbiotic relationship. Vitally reliant on constant and stable electricity, the digital mining industry can benefit greatly from the integration of renewable energy and sustainable technology.

Crypto miners can take a page out of Google’s playbook for its Nevada Data Centre Campus, which seeks to become truly carbon-zero by relying purely on clean renewable energy. The tech giant looks to become the first hyperscale cloud operator to use heat generated by the Earth to power its servers 24/7. In the same way, crypto miners can fully integrate with renewable power facilities to gain stable access to green energy. Large hydropower has displayed strong potential for this use case.

Independent studies have shown that seasons of heavy precipitation are closely correlated with increased hydropower generation. In periods where precipitation rises by 43 per cent, hydropower generation can rise by up to 39 per cent. This increase in power generation is a boon for Bitcoin miners, whose largest operational cost is electricity. Leveraging low-cost electricity allows digital miners to maximise their operational gains and aligns them to international ESG goals.

Leveraging low-cost electricity allows digital miners to maximise their operational gains and aligns them to international ESG goals.

Already a substantial share of Bitcoin mining is powered by renewable energy, with large hydro power leading the way.

According to a study by the University of Cambridge Judge Business School, 39 per cent Proof-of-Work (POW) mining is supported by renewable energy. This is higher than the share of renewables in global electricity generation in 2019, which stood at 25 per cent.

One concrete example of renewable energy and crypto mining working together is a newly-established partnership between Bitcoin miner Compass Mining and nuclear fission company Oklo. Under the freshly inked deal, Oklo has agreed to supply the crypto company with 150 MW of low-cost, carbon-neutral electricity for 20 years.

The first reactors from Oklo are planned for deployment by 2023 or 2024. Once plugged in, Compass Mining will benefit from ‘considerably’ less power costs compared to its current sources. Not only that, but its operations will also be largely free of carbon emissions.

Renewable energy integration also opens the opportunity to integrate nascent and under-developed green technology. One case for this is the use of hydrogen fuel cells to ensure low-cost electricity is maximised. Microsoft has already outlined the use of hydrogen fuel cells to power its large data centres in lieu of diesel generators in its 2030 carbon negativity plan. Crypto mining farms can be outfitted in the same way.

In cases where power generation far exceeds the consumption rate of connected digital mining farms, excess electricity can be collected and stored in hydrogen fuel cells, either as a means to support periods of increased operation or as a back-up power source in case of emergency outages. This means crypto mining operations can always have stable, low-cost backup electricity at hand.

Meanwhile, renewable and sustainable technology development can gain momentum by being paired with an economically attractive investment vehicle such as crypto mining.

The Potential for Renewable and Sustainable Tech

At the moment, one of the main challenges of wide-scale renewable energy adoption is high up-front investment costs. The typical price tag on the installation of largescale solar power systems is around USD 2,000 per kilowatt, while the cost for a new gas-fired plant is USD 1,000 per kilowatt. This steep upfront cost makes investors and lenders think of renewables as high risk, whereas they find fossil fuel plants more acceptable due to their low installation costs.

However, when paired with a highly profitable business such as crypto mining, suddenly renewable energy integration becomes a viable – and even attractive – investment. Building out solar or wind power projects in remote locations makes financial sense when connected with digital mining facilities, as Bitcoin mining would allow for faster payback on upfront investments. Connecting Bitcoin mining facilities to solar and wind power farms also solves one of the main challenges to widescale implementation of these renewable energy sources – intermittency.

Sunlight is available during the day, while winds tend to blow more heavily at night. As such, energy supply is either highly abundant or non-existent at certain timeframes. Meanwhile, electrical demand is discovered to peak around late afternoon or early evening when people arrive home and turn on their appliances.

One of the current solutions to intermittency and oversupply of renewable energy is curtailment of power production. This is a process where power output is deliberately reduced below what could have been produced to balance energy supply and demand. However, this strategy fails to truly maximise the production capacity of renewable energy facilities.

By combining Bitcoin mining farms with hydrogen fuel cells and renewable energy sources, low-carbon power can be generated, collected, and stored during periods of abundance without curtailment. This level of integration translates to several outcomes:

Firstly, it improves the returns for renewable project investors and developers, thus making solar and wind projects profitable. This can prompt the acceleration of green technology development and production, thus causing a reduction in price.

Bitcoin miners can stand as early off-takers of the energy generated by solar and wind power projects until selling to the grid becomes viable.

Secondly, it allows for the construction of solar and wind projects even before lengthy grid interconnection studies are completed. Bitcoin miners can stand as early off-takers of the energy generated by solar and wind power projects until selling to the grid becomes viable.

Thirdly, it provides the grid with readily available low-cost “surplus” electricity for unexpected power outage events caused by spikes in demand due to extremely hot or cold conditions (e.g., the early 2021 power outages in Texas). One example of this is Riot Blockchain, which has a ten-year contract to buy all the electricity it needs for digital mining at discounted rates in exchange for participation in demand response.

Put simply, as part of its agreement with the power grid operator, Riot has the option to resell all its power to the grid in times of peak power demand, essentially functioning as a ‘virtual power plant’ in times of crises. This was put to action during the recent Texas freeze, when the company shut down its operations in Rockdale for two days to accommodate the spike in demand. Assuming it earned the peak price of $9/kwh, this translates to a $90 million windfall for the company.

Final Thoughts

In view of the potential economic and environmental impacts outlined above, we can surmise that digital mining and sustainable green technology can both advance from proper integration of technologies and processes. Pairing renewables with digital mining can fuel the expansion of low-carbon energy in the electricity mix. It can also make large scale deployment of renewable energy and other low-carbon technologies more affordable. As renewable energy becomes more economically viable, this can open exploration of other sustainable innovations such as desalinating water, removing CO2 from the atmosphere, or producing green hydrogen.

On the other hand, the greening of the global digital mining industry can ultimately lead towards a renewable-dominated global hashrate. This effectively removes one of the final major barriers to the proliferation of cryptocurrency as the future of finance. Combined with decentralisation and geo-diversification, green-powered bitcoin mining strengthens the position of Bitcoin in the financial ecosystem as a stable and secure means of transaction for everyone.

Benefits of Bitcoin Mining from Economic, Social and Environmental Perspectives

admin — Mon, 19 Jul 2021 06:18:18 +0000

The most popular and far most valued cryptocurrency is Bitcoin.

The world economy is undoubtedly approaching a digital ecosystem wherein everything is going paperless, from various investment methods to money transfer. Nonetheless, new digital technologies are constantly being introduced.

Among these technologies is cryptocurrency. It is one of the most promising additions to the digital payment sector, enabling the transfer of value anywhere without using a third party. The most popular and far most valued of which is Bitcoin. Created through a process known as “mining,” it is performed using sophisticated computers that solve highly complicated math problems to verify the transaction’s legitimacy. In return, miners receive Bitcoin as a reward for completing “blocks” of verified transactions.

Over the last couple of years, this type of digital currency has significantly been gaining public attention. As it consistently gains popularity, many companies acquire direct exposure and have built much-needed mining infrastructures around the globe. In the face of impending inflation concerns, corporate treasuries, particularly in the US and Europe, consider investing a portion of their liquid asset in cryptocurrencies. Countries like Iceland, Georgia, Canada, and Venezuela that have cheap, clean energy and cool temperatures, became famous destinations of Bitcoin mining companies. Consequently, other countries like Germany, Malaysia, and Malta are encouraged to implement friendlier legislation to attract foreign companies to do business in their state.

A major step was taken by El Salvador, the very first country in the world to adopt bitcoin as a legal tender. Under their law, firms must accept bitcoin when offered as payment for product offerings, and tax contributions can also be paid in cryptocurrency. According to Richard Galvin of crypto fund Digital Asset Capital Management, “The market will now focus on adoption through El Salvador and whether other nations follow.” He also added, “This could be a key catalyst for bitcoin over the next two to three years.”

The market will now focus on adoption through El Salvador and whether other nations follow. This could be a key catalyst for bitcoin over the next two to three years.
Richard Galvin, Co-Founder & CEO, Digital Asset Capital Management

Bitcoin mining promotes local economic activities by enabling the transformation of rural areas into industrial centers.

Economic Benefits

Bitcoin mining is gaining popularity across the globe as an increasing number of countries are adopting and benefiting from it. This sector promotes local economic activities by enabling the transformation of rural areas into industrial centers. Kevin Brendle, Dickens county’s top elected official, allows bitcoin mining companies to operate in his jurisdiction. Dickens county is located in the U.S. state of Texas, which Brendle describes as a cattle county with little farming and doesn’t have a lot of economic development. He and other government officials have been vocal about their support of cryptocurrency mining coming to their state. They believe that it could stimulate the economy, give some residents stable jobs, and improve the tax base.

By allowing Bitcoin mining operators in the country, it can get access to the latest financing tools, technologies, and operational practices. Over time, the introduction of enhanced technologies results in their diffusion into the local economy. For example, the establishment of Bitcoin mining enterprises in rural areas can encourage local communities to more openly explore, embrace, and adopt new technologies and innovations into their daily lives. Particularly in the area of using digital currencies and assets.

Bitcoin miners can also help develop existing infrastructures in the countryside. A remarkable example is Cleanspark which partners with a utility company to invest in new transmission lines, benefitting the company and everyone who lives along the improved lines. Existing infrastructures like large empty buildings, airplane hangars, and aluminum smelters are also being utilized by Bitcoin miner operations, making the properties useful and productive. This practice is considered more cost-effective and less carbon emission than building new mining facilities. For instance, Lefda Mine Data Center retrofitted an ancient mine in a Norwegian fjord that now houses a 1.3 million-square-foot data center powered by hydro and wind energy.

While bitcoin mining may not create as many jobs compared with other sectors, the sector may still help in creating employment opportunities for people with various skills. Through training and experience gained in blockchain technology, the sector may develop the country’s human capital quotient. Indirectly, it can also provide employment opportunities to other related businesses in the crypto and blockchain sector.

State officials and cryptocurrency advocates also believe in the economic potential of the industries created through blockchain technology. The core properties of blockchain and other Distributed Ledger Technologies (DLT) can enable deeper technological integration, standardization, and the possibility of new business models that could have profound implications for traditional infrastructure services. It can also open research into new types of energy that could use in Bitcoin mining, like the integration of hydrogen energy.

Bitcoin operators can also play an important role in building educational facilities and educating people about crypto and blockchain technology.

Social Benefits

Funding and supporting environmental conservation, healthcare, and education development programs is another significant impact of Bitcoin mining operations. Bitcoin operators can also play an important role in building educational facilities and educating people about crypto and blockchain technology.

A notable example is Nicolas Cary, CEO of the Bitcoin wallet Blockchain, who has donated 14.5 Bitcoins worth $10,000 to the University of Puget Sound, a private university located in Tacoma, Washington. His donation will support financial aid, academic programs, research facilities, and other initiatives for the institution. Furthermore, organizations like the giving block are created to make Bitcoin and other cryptocurrencies fundraising easy for nonprofits. It empowers charities, organizations, universities, and faith-based organizations of all sizes to leverage crypto technology. As a result, an increasing number of institutions like Cape Cod Healthcare have started receiving cryptocurrency donations, opening a new channel to raise funds for social-related programs and activities.

Companies are adapting their business model to create earth-friendly mining operations that align with compliance requirements and ESG mandates of stakeholders.

Environmental Benefits

Satoshi Nakamoto, the inventor of bitcoin, compared bitcoin mining to mining gold and other resources that require energy. However, unlike many other resources, the power to mine bitcoin can be sourced from renewable resources and waste streams from conventional energy sources like oil and gas production operations and even unused baseload from utility operations. Hence, bitcoin miners are positioned to use stranded energy, feed off waste energy, and co-locate and buy operating reserves from power plants.

Different bitcoin mining companies are also taking various initiatives to accelerate the shift into a sustainable blockchain sector. They are increasingly expressing their support to the Crypto Climate Accord (CCA), a private sector that helps lay the groundwork for decarbonizing the cryptocurrency sector. Following the CCA, Bitcoin mining operators are increasingly adopting more energy-efficient protocols, using renewable energy (wind, solar, hydroelectricity), and offsetting their carbon emissions through carbon credit purchase.

One of the leading players in this effort is  Bitfarms, with five industrial-scale mining facilities in Quebec that use 100% hydroelectricity.

Greenidge Generation Holdings is also moving forward to becoming more ESG compliant by acquiring more energy-efficient bitcoin mining rigs, diversifying its energy sources, and counteract emissions from rigs with carbon offset credit purchase. Meanwhile, energy services provider Crusoe is moving away from its previous practice of burning natural gas. Instead, it deployed 45 shipping containers stuffed with bitcoin mining computers powered using natural gas that otherwise would have been burned off or flared.

Taking the more aggressive approach is Gryphon Digital Mining, which has entered into an agreement with Sphere 3D to purchase 250,000 Certified Emission Reductions to support ESG commitment and achieve net-zero emissions for the parties, allowing Gryphon to become the first carbon-negative crypto miner. Concurrently, Cleanspark is actively participating in a local program that will enable them to purchase renewable energy credits. The funds will be used to increase investment in solar energy production that would benefit the local community.

Companies are adapting their business model to create earth-friendly mining operations that align with compliance requirements and ESG mandates of stakeholders. By doing so, the sector can be the key to an abundant, clean energy future, enabling society to deploy substantially more solar and wind generation capacity, facilitating the transition to a cleaner and the more resilient electricity grid.

Bitcoin mining has created a paradigm shift in the way we look at money. The growth of digital currencies and blockchain technology will undoubtedly open many opportunities and benefits for the companies, investors, and countries adopting this revolutionary technology.