Bitcoin: The Solution To Our Energy Waste Problem

Bitcoin: The Solution To Our Energy Waste Problem

Corporations in the oil and gas industry have long since struggled with what to do when they accidentally hit a natural gas deposit when exploring for oil. While oil can easily be pumped into tankers and transported around the world, it’s a little more complicated when it comes to transporting natural gas. Gas usually needs a pipeline drawn from the exploration site to where it is utilized or some complicated on-site process to convert to LNG.  

Everything that comes into play when handling gas is the reason why most operators simply opt to let all the gas escape into the atmosphere through flaring or even just venting. By “flaring,” we mean the practice of burning into the atmosphere any natural gas that cannot be safely transported or collected and by “venting” we mean the practice of just releasing the gas without any measures being taken. Even though it’s wasteful, from the companies’ perspective, it’s cheaper than trying to put the gas to good use. 

Gas flaring has become a problem due to the sheer number of flares that take place yearly. The repercussions of flaring are obvious, with pollutants such as sulfur dioxide released during gas flaring contributing to acid rain and accelerating global warming. 

The rise of Bitcoin 

Bitcoin, in his simplest form, is a digital currency transferred directly between users without the need for an intermediary such as a central bank. In order for Bitcoin transactions to be verified,  computers must guest an increasingly difficult number via trial and error. Many don’t know how much energy this proof-of-work consensus technique devours. 

Bitcoin mining may be thought of in two ways: first, as an extra safeguard for the network, and second, as the means through which fresh bitcoins are issued into circulation. Bitcoin mining is loading software onto computers in an effort to have them race to complete a task. This challenge must be solved in order to complete a block, a process that creates new bitcoins and updates the digital ledger that records all Bitcoin transactions. 

Why gas flaring continues 

There is a clear relationship between energy and environmental concerns that must be addressed because of how difficult it is to manufacture, transport, or utilize energy without causing significant environmental harm. Energy production and consumption are closely linked to a number of environmental concerns, including but not limited to air pollution, climate change, water pollution, thermal pollution, and solid waste management. 

Since last century the United States has relied on fossil-fuel more than any other single energy source to meet its annual energy needs. The transportation sector, the HVAC sector, and the energy sector all rely on fossil-fuel based products. 

With the push for countries to embrace green energy alternatives, why, then, do we still explore oil and flare?  

A lot of infrastructures are still heavily reliant on oil, and the shortage of it will cause catastrophic economic collapse. Nowadays, more than 80%(1) of the energy used in the world still comes from fossil fuels, be it natural gas, coal or oil. Also, as it stands, the amount of renewable energy generated annually accounts for less than 10% of total energy consumed. So it’ll be a while until we can completely phase out fossil fuel energy sources.  

A look at Bitcoin’s energy dilemma 

Incentives for mining cryptocurrency have led to the widespread use of energy-intensive mining hardware that places a strain on infrastructure powered by fossil fuels. This has resulted in Bitcoin being attacked by environmentalists who claim the cryptocurrency is inefficient in design. 

Amongst the various mainstream cryptocurrency coins, bitcoin accounts for about 90% (2) of the mining process. The mining sector is increasing its electricity use, despite the fact that mining equipment is getting more efficient. 

As more tokens are mined, actors need more powerful computers to continue mining. Bitcoin mining already consumes 0.5% (3) of global electricity consumption, with most mines connected directly to city grids. Recent years have shown a trend that more and more bitcoin mining will be performed on edge of the grid or off-grid. They are looking for more renewable and clean energy sources as they are cheaper and, because of it, nowadays around 64% (4) of Bitcoin energy sources are sustainable. 

Bitcoin’s energy consumption data 

Here are some facts regarding bitcoin’s energy consumption: 

  • Bitcoin mining uses approximately as much energy each year as Washington State. 
  • A small percentage of the United States’ overall yearly electricity usage goes toward powering the Bitcoin network. 
  • Bitcoin mining consumes enough power to power over ten thousand average American households for a year. This is more energy than the whole population of Finland (about 5.5 million) consumes every year. 
  • Currently, the Bitcoin network uses about 120 TWh per year (5) 

How Bitcoin may help solve the world’s energy crisis 

Fossil fuel is estimated to run out in two centuries max. Until then, it is beyond wasteful for natural gas to be flared or even vented in the atmosphere without any use. Nowadays, oil companies have been looking for novel partnerships to allow the utilization of this precious resource.  

The future looks brighter when you look at bitcoin mining operations to speed up our progress in methane emissions mitigation. Their miners reduce the pollution, greenhouse gas emissions and carbon footprint print that’ll occur from methane released directly into the atmosphere. Keep in mind that one molecule of methane has a greenhouse effect up to 80 (6) times greater than a molecule of carbon dioxide. Thus, using methane as power source for bitcoin mining means that this mining activity is actually reducing greenhouse emissions. Bitcoin mining can reduce our global emissions by up to 8% (7) by 2030, simply by converting the world’s wasted and dangerous methane in electricity to mine bitcoin. It is estimated that in the near future this rationale will lead this industry to be the first major industry with negative carbon emissions 

Using bitcoin also makes it financially feasible for oil and gas companies to produce oil and use their own methane in a way that’s environmentally friendly with financial incentives. This means that bitcoin mining can become an important part of the solution to our energy problem. As methane is used in the energy production required to run a bitcoin mining operation, its carbon footprint is significantly reduced. This way, stranded and flared gas will soon become things of the past in the oil and gas industry.  

 

References: 

  1. World energy mix – https://ourworldindata.org/energy-mix
  2. Proof of Work protocols hashrate – https://bitinfocharts.com/comparison/hashrate-btc-doge-ltc-bch-bsv.html#3y 
  3. Bitcoin energy consumption – https://ccaf.io/cbeci/index/comparisons.
  4. Bitcoin mining with sustainable sources – https://bitcoinminingcouncil.com/bitcoin-mining-council-survey-confirms-year-on-year-improvements-in-sustainable-power-mix-and-technological-efficiency-in-q4-2022/ 
  5. Bitcoin energy consumption – https://ccaf.io/cbeci/index 
  6. Methane emissions impact – https://unece.org/challenge 
  7. Impact of bitcoin mining on methane emissions – https://bitcoinmagazine.com/business/bitcoin-mining-can-prevent-climate-change 

 

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