Along the dirt road in the Farm Country of Texas, cryptocurrency company Argo Blockchain is building a power plant for the Internet age: a corrupt “mining” site with computers that generate new bitcoins. ۔
But unlike other bitcoin mining operations, which use large amounts of fossil fuels and emit carbon, Argo claims it is trying to do something environmentally responsible. As Argo chief executive Peter Wall led a tour of the 126,000-square-foot construction site one morning this month, he pointed to a row of wind turbines a few miles down the road, their white spokes in sunlight. Were shining
He announced that the new facility, one hour outside Lubbock, would be fueled mostly by wind and solar energy. “It’s bitcoin mining nirvana,” Mr Wall said. “You look into the distance and you find your renewable strength.”
Faced with criticism from politicians and environmentalists, the cryptocurrency mining industry has resumed branding efforts to challenge the prevailing notion that its electric computers are harmful to the climate. ۔ The five largest publicly traded corrupt mining companies say they are building or already operating renewable energy plants, and industry executives have begun arguing that corrupt Demand from miners will create opportunities for wind and solar companies to open their facilities.
The effort – partly a public relations exercise, partly a real effort to make the industry more sustainable – has intensified since last spring, when China launched a crackdown on corrupt mining, which Some mining operations were forced to relocate to the United States. A trade group called the Bitcoin Mining Council was formed last year, partly after Elon Musk, to deal with climate issues. Criticized Fossil fuel industry.
Corrupt mining does not involve picking or shoveling. Instead, the term refers to a verification and currency creation process that is essential to the Bitcoin ecosystem. Powerful computers race each other to process transactions, solving complex mathematical problems that require millions of numerical estimates per second. As a reward for this verification service, miners receive new coins, which provide a financial incentive to operate the computer.
In the early years of Bitcoin, a crypto enthusiast could earn money by running software on a laptop. But as digital assets have become more popular, the amount of power needed to make bitcoins has increased. One bitcoin transaction now requires more than 2,000 kilowatt hours of electricity, or enough energy to power an average American household for 73 days, researchers say. Estimates.
To achieve this, there are some miners. Reviving broken coal plantsOr use low-cost natural gas to power your computers. Last month, a study in the journal Joel found that bitcoin mining worldwide could be responsible for about 65 megatons of carbon dioxide a year, compared to Greece’s emissions.
According to the study, the use of the Bitcoin network’s green energy sources also fell by an average of 25% in August 2021 to 42% in 2020. (Industry says its average renewable use is close to 60 percent.) The result of China’s crackdown, which cut off a source of cheap hydropower. But it also reflects the underlying economic incentives, said Alex de Vries, one of the authors of the Joel study. Renewable energy is an intermittent source of electricity – the sun shines only a fraction of a day, and the wind speed fluctuates considerably.
“What a miner would do if he wanted to make the most of his profit, he would put his machine in a place where it could run all day,” said Mr de Vries.
The use of energy from the Bitcoin balloon has long angered environmentalists. But the criticism that made the strongest impression came from Mr. Musk, a longtime bitcoin booster who Said In May, Tesla, its electric car company, announced on Twitter that it would no longer accept cryptocurrency payments because of “increasing use of fossil fuels for bitcoin mining and transactions.”
His tweet sent the mining industry into a state of crisis. Michael Sailer, chief executive of software company MicroStrategy, which invests heavily in bitcoin, approached Mr Musk to discuss the climate issue. A group of mining executives, including Mr. Sailor and Mr. Wall, later met with Mr. Musk at Zoom.
“He wanted to make sure the industry was sustainable, and he gave us some coaching,” Mr Sailor recalled. It was encouraging: “Know how clean energy is, how sustainable energy is. Guess how much you’re using.” (Mr Musk did not respond to a request for comment.)
Following the call, Mr. Sailor set up the Bitcoin Mining Council, a forum for industry to share ideas and coordinate environmental strategies. One member, TeraWulf, has pledged to run cryptocurrency mines using more than 90% zero carbon energy. It is working on two projects ایک a retired coal-fired hydroelectric plant in Upper New York, and a nuclear-powered facility in Pennsylvania.
“Everyone I’m talking to now is talking about carbon neutrality,” said Paul Pragar, Terra Wolf’s chief executive. “The language has changed completely.”
But financial preferences and technical barriers to the corrupt mining industry, including more than a dozen publicly traded companies such as Argo, are preventing a complete shift toward renewable energy. In late 2020, Marathon, one of the largest publicly traded mining companies, began mining bitcoin at a coal-fired plant in Montana. Cheap energy.
In Illinois, cryptocurrency mining company Sangha Systems has rebuilt an old steel mill in the town of Hannibal. Sangha is being beaten by Spencer, a former lawyer. They say He founded the company to promote clean energy. But about half the power of the Hennepin operation comes from fossil fuels.
“It was a compromise we had to make,” Mr Marr said. “It simply came to our notice then.
A Guide to Cryptocurrency
In recent months, Texas has become a hotspot for crypto mining, attracting attention. More than two dozen companies. The state has an exceptional incentive structure that suits the fledgling industry: Texas grid operators offer discounts to companies that can plug them in immediately after an increase in electricity demand across the state. Delivery of energy to ordinary homeowners may be possible. Many cryptocurrencies can be turned on or off in seconds, allowing them to take advantage of privileges with minimal hassle.
The deal was part of an attraction in 2017 for Argo, a London-based company that operates two other mines in Quebec, mostly using hydropower. Mr. Wall said Argo was also attracted to a lot of green energy in West Texas. The facility outside Lubbock will be connected to the western sector of Texas’ energy grid, where about 85 percent of the electricity comes from wind and solar infrastructure, including a set of turbines that are practically the front door of the Argo construction site. Sits on
But Mr. Wall cannot guarantee that there will be no carbon footprint in the new Argo center. This will require ignoring the grid and buying energy directly from the renewable power company.
“Many of these renewable energy producers are still a little skeptical about the corrupt currency,” he said. “Corrupt miners do not have credit profiles to sign 10- or 15-year deals.”
In the future, he said, Argo plans to build its own solar panels on site in Texas, and the broker will negotiate directly with local renewable energy companies to purchase energy.
The wider cryptocurrency community is divided over whether clearing the mining sector is the best way to achieve environmental sustainability. Bitcoin’s energy-efficient authentication system is called “proof of work.” Some in the industry are pushing for the creation of new cryptocurrencies on a different system called “proof of stake”, which uses less than 0.01% of the energy used in the mining process.
Mr Wall said he had no objection to using the alternative system. Still, he said, he believes in the long-term potential of Bitcoin’s financial transformation, even though he wants miners to be called something that seems less elusive, such as “validators.”
This is a war he is unlikely to win. But despite the backlash, he said, companies would continue mining bitcoin.
“It simply came to our notice then. It was a fact,” he said. “We need to do it in an environmentally friendly way.”