Bitcoin (BTC) mining has always been a controversial topic. But, Bitcoin’s proof-of-work (PoW) model has reached new levels of concern as senior decision-makers and investors pay closer attention to environmental, social and governance factors.
As such, many crypto miners are highlighting environmentally friendly practices by acquiring carbon offsets. Yet, some would argue that this isn’t enough to guarantee green Bitcoin mining. Other risk factors may also be involved with carbon credits.
For instance, Kevin O’Leary — the Canadian entrepreneur better known as “Mr. Wonderful” for his role on Shark Tank — told Cointelegraph that he typically indexes public mining companies like Marathon Digital Holdings, Riot Blockchain Inc. and others. However, O’Leary pointed out that once these companies claimed carbon neutrality through carbon offsets, their stocks dropped drastically. O’Leary believes this is because the United States Securities and Exchange Commission (SEC), may soon plan to audit carbon credits. O’Leary expressed his concern, stating:
“Carbon offsets are unauditable. So indexers like me dumped those shares — we had to sell. The only way institutions will now invest in Bitcoin mining is for those companies to claim there is no carbon involved at all.”
Bitcoin mining and data centers
In order to ensure zero carbon mining, O’Leary explained that Bitcoin miners should build in parallel with data centers. This would then allow mining companies to efficiently use excess energy omitted from data centers to mine Bitcoin, resulting in “zero carbon displacement,” a process that produces zero carbon emissions.
Bitcoin mining company Bitzero began implementing such a model two years ago in Norway. Akbar Shamji, CEO and founder of Bitzero, told Cointelegraph that the company initially built an infrastructure partnership with Norway’s local government two years ago that prompted the region to release unused hydroelectric power generation for Bitcoin mining:
“This was the perfect opportunity for us to test this idea. At the same time, big data companies started to use renewable energy sources in places like Norway, but this wasn’t profitable for the region. We’ve built a long-term, low-cost 100% zero carbon displacement power source to have an edge over the market. We hit revenue when we mined our first Bitcoin in December 2021.”
Being aware of the massive demand for data storage today, Shamji further explained that electricity generated from data centers should be properly harnessed. “We call this the ‘Norway model.’ Electricity generation is there but it remains stuck at high voltage. So, we executed the electrical step down from high voltage to low acquiring transformers and substation, allowing us to drive containers full of ASIC miners efficiently,” he remarked.
In other words, Bitzero draws power directly from surplus capacity at local hydro plants, resulting in zero carbon displacement. At the same time, Shamji explained that Bitzero is delivering fixed data centers made of sustainable and local materials that consist of heat capture technology.
“In the case of Bitcoin mining, when electricity passes through these computers, the PoW algorithm doesn’t take much energy to generate. If this wasn’t implemented, the heat generated from these computers would go back into the air and be lost entirely,” he said. Although a zero carbon displacement model is yet to be widely adopted, Shamji said that Bitzero typically mines 129 Bitcoin per month, using 40 megawatts of power. He added that this will eventually grow to 110 megawatts.
The crypto mining company Argo Blockchain also plans to open a data center in West Texas to conduct mining operations. While Argo isn’t taking a zero carbon displacement approach, Peter Wall, CEO of Argo, told Cointelegraph that the company aims to become carbon neutral:
“There’s an enormous amount of renewable power in West Texas, and Argo’s mission…
Read More: cointelegraph.com