Category: Bitcoin Mining

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Vespene Energy Raises $4.3 Million to Turn Landfill Emissions to BTC

Technology developed by Vespene Energy that converts waste methane into electricity will be used to power on-site Bitcoin mining at multiple US landfills enabled by a US$4.3 million financing round announced this week.

Investment firm Polychain Capital led the funding, which will initially see Vespene Energy install its solution – off-grid micro turbines that turn methane into energy – at a pilot site in California, where the company is based. 

Co-founder and CEO Adam Wright said that helping governing authorities make money from landfill methane through bitcoin mining supported the broader goal of prompting a transition to renewable energy to mitigate greenhouse gas emissions.

And because our sites require no connection to the grid or pipeline buildout, we can rapidly turn otherwise harmful and wasted landfill methane into a clean power source for carbon-negative bitcoin mining. This partnership with Polychain will empower us to scale and seize this tremendous opportunity to help solve the climate crisis.

Adam Wright, CEO, Vespene Energy

Greening Bitcoin Mining with Otherwise ‘Wasted’ Energy 

The potential for Vespene Energy’s approach to help transition bitcoin mining towards carbon-neutral energy sources was appealing to investors, as noted by Polychain Capital founder and CEO Olaf Carlson-Wee: 

The continued adoption of Bitcoin will benefit from solutions that make the energy mix for mining more focused on clean energy. We are excited to partner with Vespene as they build a creative solution to use mining to eliminate a potent greenhouse gas source, while making its energy mix greener.

Olaf Carlson-Wee, founder and CEO, Polychain Capital 

While Vespene claims to be the first company to mine bitcoin using methane from landfill waste, it’s not the first to repurpose gas to gain revenue from bitcoin mining.

In April this year, gas miner Bengal Energy trialled using power generated by gas wells for bitcoin mining, after being unable to connect the wells to a pipeline for distribution. Unwanted gas as a byproduct of oil and gas mining operations that would normally be burnt off – known as gas flaring – has also been identified as an emerging opportunity to power bitcoin mining while reducing environmental impacts.

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Australia Bitcoin Mining Crypto News

Australian Green Bitcoin Miner ‘Iris Energy’ Doubles its Hash Rate

Australian green Bitcoin miner Iris Energy has successfully doubled its hash rate on completion of phase two of its Mackenzie site and expects to add further capacity to its Prince George site, also in Canada, by the end of September:

Way Ahead of Schedule

More than a month ahead of schedule, Iris Energy switched on 41 megawatts of Bitcoin mining machines in British Columbia on August 5. The move has lifted the Bitcoin network’s exahashes/second (EH/s) rate to 2.3 EH/s.

https://irisenergy.co/leadership-team/

We are particularly pleased to continue our track record of delivering projects on schedule, despite the current market backdrop and ongoing international supply chain challenges.

Daniel Roberts, co-founder and co-CEO, Iris Energy

Iris Energy has a second site in British Columbia, Prince George, to which it intends to add another 1.4 EH/s (needing 50 MW of energy capacity). As a result of the prompt hash rate increase, the company’s Nasdaq-listed shares were up by more than 10 percent on August 8.

Previous Positives

In March 2021, Iris Energy smashed its pre-IPO funding target of A$20 million. Thanks to an unexpected Platinum Asset Management (PAM) financial commitment, the target was doubled to A$40 million. PAM had pledged $13 million in capital ahead of the planned IPO.

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Bitcoin Mining Crypto News JPMorgan

Bitcoin Mining Cost Sinks to $13,000 Amid Crypto Winter: Report

According to a global markets strategy PDF released by leading investment bank JPMorgan, the price of bitcoin (BTC) production has sunk to approximately US$13,000 from early June’s US$20,000.

This is reportedly the result of the bear market brought on by the crypto winter:

Bitcoin Miners: Crypto Winter Strikes Back

JPMorgan has found that the production cost to mine one Bitcoin has dropped from an estimated US$24,000 to a lowly $13,000, a 10-month low according to Bloomberg.

The bank’s strategists, led by Nikolaos Panigirtzoglou, have found that the recent plunge in BTC’s production costs resulted from the following combination of factors:

https://www.linkedin.com/in/nikolaos-panigirtzoglou-5012975/overlay/photo/

The decline in electricity use as proxied by the Cambridge Bitcoin Electricity Consumption Index, while the hash rate has been fluctuating in recent months with no clear downtrend.

Nikolaos Panigirtzoglou, strategist, JPMorgan

Despite improved profitability suggesting that pressure for miners to sell their bitcoin holdings for liquidity purposes could lessen, the decrease in costs is typically seen as a negative for the overall bitcoin price:

Although opinions vary, data from MacroMicro suggests that the production cost remains steady at approximately US$17,700. MacroMicro justifies this by explaining that the lower the mining costs, the more miners will join. However, when mining costs are higher than miners’ revenue, numbers will logically fall.

Funding a Mining Operation

The cost of bitcoin mining depends on several variables, chief among which is electricity costs incurred by miners for their required machinery. Providing bitcoin’s price exceeds maintenance costs, a mining operation will be profitable. However, mining operations must also consider infrastructure, labour and hardware costs for the maintenance of mining farms, all of which can vary. This crypto winter is also taking place while energy prices soar globally.

Bitcoin miners aren’t alone in their struggles, however. Miners of all sorts are facing pressure created by the damaging plunge of bitcoin. Among those experiencing exponential lows this year-to-date: Marathon Digital Holdings is down 73 percent, Riot Blockchain Inc has dropped 73 percent, and Core Scientific Inc is down a whopping 83 percent. Worse yet, there’s scope for these figures to continue falling.

Luckily, there is hope when it comes to infrastructure, with the Bloomberg report suggesting mining costs can be reduced via the deployment of more energy-efficient mining rigs, such as those becoming available thanks to Intel and Bitmain.

Bitcoin Falls on Rough Times

July has been somewhat of a nightmare month for bitcoin as it fell under US$19,000 following the US’s highest inflation print in 40 years. Economists had initially predicted an 8.8 percent June year-on-year inflation rate; however, the reality was 9.1 percent, which meant an immediate dip in BTC’s price.

To add further stress, Bitcoin has also had to address the strain placed on diamond hands, namely those investors who normally refrain from selling an investment despite downturns or losses. Glassnode, an on-chain analytics firm, discovered that while the total unique Bitcoin count had exceeded 1 billion, diamond hands were selling at an average loss of 33 percent.

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Australia Bitcoin Mining Crypto News

‘Black Mountain Energy’ Looks Set to Enter Bitcoin Mining in Australia

Black Mountain Energy, a US-owned resource company headquartered in Australia, has received a “non-binding” letter of intent from Highwire Energy Partners regarding collaboration for potential entry into the bitcoin mining industry.

The proposed location for the crypto mining project is a fracking site in the Kimberly region of northwest Western Australia; however, despite BME’s charter of “responsibly developed and environmentally conscious natural gas supply”, environmentalists claim the project will not benefit from emission reductions.

https://www.naturalfocusaustralia.com.au/western-australia/broome-and-the-kimberley/
BME is exploring project Valhalla in the Kimberley region of northwest Western Australia.

Flared Methane to be Diverted to Crypto Servers

Highwire Energy Partners will likely work with BME to divert flared methane gas from well-testing to power mobile cryptocurrency servers. This well-testing, and eventual project roll-out, is taking place at BME’s Valhalla Project fracking site in the Kimberley’s Canning Basin.

Rhett Bennett, BME’s chief executive officer, has stated that the process would likely aid in a reduction in emissions by avoiding flaring off the excess gas, allegedly reducing CO2-equivalent emissions by around 63 percent.

https://bm-resources.com/team/rhett-bennett/

Flaring natural gas certainly is not [Environment, Social and Governance]-friendly … so the ability to utilise that gas for power and ultimately create a product, in this form, is a much better solution.

Rhett Bennett, CEO, Black Mountain Energy

BME’s current negotiations involve the use of 5 terajoules of gas per day, which can supply up to 25 megawatts of power for the crypto servers. This translates into approximately A$100,000 worth of Bitcoin daily, providing BME uses the best available mining equipment.

However, anti-fracking organisations are retaliating against the plan, suggesting that bitcoin miners should have to use a renewable energy source rather than environmentally damaging fracked gas. As noted by Dr David Glance, director of the University of Western Australia’s Centre for Software Practice, mining operation computers established in hot and remote areas require more energy to cool.

https://theconversation.com/profiles/david-glance-148

From an environmental perspective, it makes absolutely no difference whatsoever if they burn the gas or they use it to mine cryptocurrency … It will still produce carbon dioxide.

Dr David Glance, UWA Centre for Software Practice

As it stands, the Valhalla project is yet to receive approval from the Environmental Protection Agency (EPA), which does not expect to have a report finalised until early 2023.

Other Energy Giants Mining Crypto

Black Mountain Energy is not the first company to utilise natural resources for crypto mining. In March, ExxonMobil diverted some of its unused natural gas to power mining operations in North Dakota, US. This was managed via a partnership with solutions specialist Crusoe Energy Systems, which converted the gas into mobile generators that then powered the mining operations.

Meanwhile, back in Australia, Canadian oil and gas miner Bengal Energy has commenced an assessment of the profitability of mining bitcoin from stranded gas assets in the Australian outback. The project has already led to the reassembly of previously out-of-operation gas wells in South Australia’s Cooper Basin.

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Bitcoin Mining Crypto News

BTC Mining Could Reduce Global Carbon Emissions By +5%

Bitcoin mining could reduce global carbon emissions by 5.32 percent over the next 23 years by aggressively targeting leaked methane, according to a report by New Zealand-based entrepreneur and ESG (environmental, social and governance) analyst Daniel Batten:

Batten claims that bitcoin mining is the only “technologically feasible” method of reducing methane emissions, and says the practice could potentially reduce global warming by up to 0.15 percent by 2045.

In February this year, digital asset management firm CoinShares produced its own report suggesting that bitcoin mining was responsible for less than 0.05 percent of global carbon emissions, a figure CoinShares described as “inconsequential”.

No Need for Carbon Credits or Tax Incentives

Another report released in April showed that power consumption levels associated with bitcoin mining had decreased by 25 percent in the first quarter of 2022, yet Batten’s report maintains that mining remains more effective than leveraging carbon credits.

“Bitcoin mining is the only way to combust leaking methane that is both economically and logistically feasible without carbon credits or the governments of major industrialised nations needing to issue tax incentives and funding in unison,” Batten’s report says.

Bitcoin mining has shown early evidence of being able to scale with an exponential growth rate.

Report by ESG analyst Daniel Batten

“It’s easy to make a premature and superficial assessment based only on energy consumption that bitcoin has a net negative environmental impact,” Batten’s report adds. “Such reasoning is flawed, since net impact can only be established by considering both environmental cost and benefit.”

Earlier in May, the Bitcoin Mining Council issued a stinging letter to the US Environmental Protection Agency in response to proposed increased regulation of bitcoin and proof-of-work consensus mechanisms. It was endorsed by 50 signatories, including Jack Dorsey and Michael Saylor, and pointed to misconceptions in the EPA’s original letter of complaint.

Chief among these was that “bitcoin mining facilities across the US are polluting communities and are making an outsized contribution to greenhouse gas emissions”.

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Bitcoin Bitcoin Mining Markets

Bitcoin Mining Stocks Have Been Hammered in 2022

Bitcoin mining stocks have seen a sharp decrease in value with the price of Bitcoin (BTC) and the wider crypto market going down in parallel. Mining stocks have especially suffered due to more businesses holding the asset on their balance sheets and the lack of a significant hashrate increase.

As the cryptocurrency market continues on a sharp downtrend, Bitcoin mining stocks have followed. Even though they fared very well in 2021, they’ve taken a bigger knock than the cryptos in 2022. While the digital asset itself was recording losses close to 30 percent, bitcoin mining stocks have taken what amounts to a double hit, with more than 60 percent losses in some cases:

According to Jaran Mellerud, an analyst at Arcane Research, data from the beginning of the year shows the top five Bitcoin mining stocks by market cap have all been halved. Riot – one of the hardest hit by the slump – is down 65 per cent year-to-date (YTD), but is still trading one per cent in the green (which can’t be said for the others).

Mining stocks trading in the red. Source: Arcane Research

Additionally, when looking at the top 10 mining companies, the one down the least had lost 41 per cent, a testament to the devastation of the niche. Most of these companies have not grown their hashrate as fast as investors were hoping and this has impacted them significantly. As it stands, 90 per cent of BTC has been mined and the hashrate is at an all-time high.

How are Mining Stocks Affected by BTC Price Drops?

As the price of bitcoin continues to drop, cryptocurrency mining stocks also lose out. One of the major reasons is because many tech and other companies now hold bitcoin on their balance sheets through an exchange traded fund (ETF). Any decrease in price leads to lower revenue for these companies.

Usually, when the BTC price falls, the global hashrate also decreases, but this has not been the case this year. The combination of rising global hashrate and a falling BTC price has led to less BTC mined for these companies and a lower USD denominated value of their mined BTC.

Jaran Mellerud, analyst, Arcane Research

A good example of this is MicroStrategy, which has large amounts of the mined token on its balance sheets that can be used as a proxy by investors who do not want to directly hold bitcoin in their portfolios: 

Source: Bloomberg

According to Steven McClurg, chief investment officer of Valkyrie Investments, “The correlation between the two asset classes has grown more pronounced in recent months because the number of publicly traded companies involved in blockchain and digital assets continues to grow, and is not likely to reverse course.”

As bitcoin finds its way into organisations (both listed and not), the price of bitcoin will influence their balance sheets. In the case of Nasdaq and tech stocks, both are seeing red crypto fall under their umbrella.

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Bitcoin Mining Crypto News Regulation

Saylor and Dorsey Write to Environmental Agency to Tackle BTC Energy FUD

Persistent and well-funded ESG (environment, social and governance) criticism of Bitcoin has led to the Bitcoin Mining Council (BMC) issuing a stinging letter to the US Environmental Protection Agency (EPA):

Setting the Record Straight

Over 50 signatories, including Jack Dorsey and Michael Saylor, have endorsed a letter from the BMC responding to an April 20 letter co-signed by 20 House representatives arguing for increased regulation over Bitcoin and proof-of-work consensus mechanisms.  

The BMC, established last year, carefully proceeded to respond to several of what it termed “misconceptions”, outlined in the original letter of complaint.

The first was that “bitcoin mining facilities across the country are polluting communities and are having an outsized contribution to greenhouse gas emissions”. BMC responded by pointing out that the authors were confusing data centres and power generation facilities:

Emissions are created at the power generation source upstream from the data centres. Digital asset miners simply purchase electricity from the grid, the same as Microsoft and other data-centre operators. Data centres engaged in the industrial-scale mining of digital assets do not emit CO2 or any other pollutants, like other industrial facilities do; they are merely server farms engaged in computation.

BMC letter

BMC Survey: 58.4% of BTC Mining Sustainable

Regarding the “outsized” contribution reference, BMC noted that its recent survey found 58.4 percent of global bitcoin mining was sustainable, notably higher than the average industrial sustainable energy usage in the US, which is at 21 percent. As reported by Crypto News Australia earlier this year, BTC mining emissions have been found by others to be “inconsequential”.

Another accusation in the letter stated that “a single Bitcoin transaction could power the average US household for a month”. In response, the BMC said the claim was “patently and provably false” as Bitcoin transactions do not carry an “energy payload”:

Broadcasting a transaction requires no more energy than a tweet or a Google search.

BMC letter

It isn’t the transactions that consume energy, it’s the energy consumed by miners competing for issuance and fees, which by design are drastically falling given that 90 percent of BTC supply has already been issued.

After outlining the Lightning Network’s ability to scale BTC payments, BMC concluded that “it therefore makes no sense to associate energy consumption with individual transactions, since Bitcoin’s energy usage is not related to transactions, and Bitcoin can scale arbitrarily without increasing its transaction count or energy usage”.

PoW vs PoS: Unfair Comparison

Finally, the BMC letter went into painstaking detail as to the difference between proof-of-work versus so-called “environmentally friendly” proof-of-stake consensus mechanisms. The latter, it suggests, “should be understood as an industry term for a shareholder-governed financial consortium” and is “wholly taxonomically different, with different objectives and capabilities”. BMC concluded that it was highly misleading to compare the energy use of both:

Across a long enough timescale, facts usually triumph over ignorance. In this case, it seems inevitable despite the best efforts of some who appear to prefer repeating one refuted claim after another.

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Bitcoin Bitcoin Mining Industries

Tesla Powered Megapack Battery Uses 100% Solar Energy to Mine Bitcoin

Tesla, Block, and Blockstream are working together to build an open-source bitcoin mine that operates by only using renewable energy. The project will make all data available and aims to make such “green” mining ventures more viable.

Industry Leaders Team Up for Green Bitcoin Mining

In the Bitcoin (BTC) mining sector, some of the world’s biggest players have started collaborating to build the next generation of mining facilities. According to an announcement from Blockstream and Block Inc (formerly known as Square), both companies will be teaming up with Tesla to build a fully solar-powered bitcoin mining facility in Texas, US.

The facility will be powered by the 3.8 megawatt (MW) Tesla Solar PV array and energy stored in the 12 megawatt-hour (MWh) Megapack. The facility will also be an “open-source” proof-of-concept bitcoin mine operating on 100 per cent renewable energy.

The mine will process an estimated 30 petahashes per second and is anticipated to be complete before the end of this year. The entire project will be conducted to determine the feasibility of a solar-powered mining operation. This project was initiated in mid-2021 when Square invested US$5 million into infrastructure for the solar-powered crypto mine.

Mining Data to be Freely Accessible

By saying the mine will be “open-source” means that regular reports about the economics of the project will be made publicly accessible. Important metrics such as power output, bitcoin mined, and at a later stage, key metrics about the solar performance will be made available.

We figured we would actually make it a reality and public information in a more transparent way that’s usually done for commercial competitiveness reasons so that we can have a more informed discussion […] If we publish the raw data, the raw financial information, it speaks for itself.

Adam Back, Blockstream CEO

The data will be displayed through a 24/7 dashboard accessible through a browser, “providing the industry with a real-world, real-time case study of a zero-emission energy Bitcoin mine”.

People like to debate about the different factors to do with bitcoin mining. We figured, let’s just prove it. Have an open dashboard so people can play along; maybe it can inform other players to participate.

Adam Back, Blockstream CEO

If the project is successful, it will be operable from anywhere without the need for local infrastructure. This makes carbon-free bitcoin mining at scale available to anyone with a few million to spare for the infrastructure.

Advancing Bitcoin and Renewable Energy

Blockstream CEO Adam Back believes that “by collaborating on this full-stack, 100 percent solar-powered bitcoin mining project using solar and storage technology from Tesla, we aim to further accelerate bitcoin’s synergy with renewables”.

The rush for a green bitcoin has seen many companies change and innovate ways to make BTC sustainable. However, a recent report from digital asset management firm CoinShares stated that the network’s contribution to global carbon emissions was “inconsequential”.

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Bitcoin Bitcoin Mining Crypto News

BTC Milestone: 90% of Supply Issued and Mining Difficulty Hits All-Time High

This past weekend marked a momentous occasion in Bitcoin’s history as supply issuance crossed the 90 percent mark. As the 19 millionth block was mined, Bitcoin Takeover founder Vlad Costea commented: “There are only 2 million BTC left to mine in the next 118 years!”

How is the 21 Million Bitcoin Cap Defined and Enforced?
Bitcoin supply issuance schedule. Source: Cypherpunk Cogitations

‘Scarcity Intensifying’

In and among celebrations on Twitter, many users took the opportunity to comment on Bitcoin’s remarkably well-designed inflation model. As illustrated above, the bulk of Bitcoin’s 21 million hard cap issuance is front-loaded in the early years.

With the block reward halving every four years, and the next being scheduled in 2024, Bitcoin’s scarcity is becoming increasingly self-evident:

Mining Difficulty Soars

To recap, mining difficulty is a relative measure of how difficult it is to find a new block. This is adjusted on a periodic basis correlated to the hash power being deployed by the network. The greater Bitcoin’s hash power, the more difficult it becomes to find blocks.

Amid the excitement of Bitcoin reaching the historic 90 percent issuance rate, the network also recorded its highest mining difficulty to date, rising 4.31 percent to 28.59 trillion. Notably, mining difficulty is up 100.6 percent from its 2021 low of 13.68 trillion.

BTC mining difficulty all time. Source: BTC.com

A recent illustration was in 2021, when China banned Bitcoin mining (again), resulting in the network difficulty reducing by 16 percent as significant hash power was taken offline.

The long and short of it is that an all-time high for mining difficulty makes it more difficult than ever for Bitcoin miners to “find” blocks, making the network even more robust and secure than before. Remarkably, this is the second time in three weeks it has reached such a milestone.

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Bengal Energy is Mining BTC in the Australian Outback Using Gas Wells

Canadian oil and gas miner Bengal Energy has commenced a trial to assess the profitability of mining bitcoin from its stranded gas assets in the Australian Outback.

According to a report in The Australian, Bengal Energy has commenced its program to install approximately 70 Bitcoin mining rigs within a “donga”, a term that left some confused from the outset:

‘Stranded Energy’ Problem

The initial project entailed assembling a series of previously out-of-operation gas wells in South Australia’s Cooper Basin, all of which were purchased from Santos Energy and Bridgeport Energy.

Bengel Energy’s chief operating officer, Kai Eberspacher, commented that the newly acquired wells however posed a significant problem given that they were “stranded” – able to produce power but unable to be distributed as current pipelines are out of reach.

While a pipeline is under construction, efforts have been delayed due to Covid-19 induced supply chain bottlenecks. In Eberspacher’s words:

We were basically looking at six months of having wells ready but without an outlet. We were dealing with stranded assets.

Kai Eberspaecher, chief operating officer, Bengal Energy

Bitcoin Mining Plugs Gap

After having outlaid the initial capital without a return on investment, Bengal Energy turned to portable Bitcoin mining rigs in dongas. A trial donga is being fitted with 66 mining rigs, able to generate approximately 0.005 BTC, or A$315, per day.

Kai Eberspacher, Bengal Energy’s chief operating officer. Source: The Australian

If the trial is successful, the company has indicated that it intends increasing its mining efforts by a factor of 10 to 20.

Energy Companies and Bitcoin – Match Made in Heaven

Despite recent efforts by some to discredit bitcoin mining, we’re seeing growing evidence of energy companies leveraging stranded assets and flared gas to power bitcoin mining operations.

While this has been happening in West Texas for some time, last week US energy giant ExxonMobil joined ConocoPhillips in disclosing that it was mining bitcoin with flared gas and looking to expand.  

A recent report found that bitcoin mining consumed as little as 0.05 percent of global energy with emissions at “inconsequential levels”. It’s also been suggested that up to 58 percent of Bitcoin’s energy composition is renewable, making it one of the greenest industries in the world.

Irrespective, those who believe bitcoin has no value will necessarily also believe that its appropriate energy use is zero:

“Imaginary money”… #NGMI.