May 19, 2024

Bitcoin Mining Is Finally Rewarding Again With Energy Efficiency

Bitcoin Mining Can Be Profitable Again with Energy Efficiency

Bitcoin Mining Can Be Profitable Again with Energy Efficiency

The bitcoin mining industry is undergoing a significant transformation, spurred by both the need for energy efficiency and the push towards sustainability. The adaptation of advanced cooling methods like immersion cooling, where mining hardware is submerged in special coolants, has been a game-changer. This technique allows for a boost in hash rates without increasing power consumption and extends the life of mining equipment, as detailed by Isaac Holyoak from CleanSpark​​. It’s an innovation that both reduces environmental impact and enhances operational efficiency.

Beyond cooling, the sector is exploring how to utilize excess energy more productively. Unused heat from mining activities is now being redirected for agricultural purposes or fed back into the power grid, effectively turning a cost center into a revenue stream. Chainergy’s use of biomethane from agricultural waste to power their operations is a prime example of this circular economy approach, which benefits both the bottom line and the environment​​.

Collaborations with energy utilities are becoming increasingly important. By aligning their operations with renewable energy availability, firms like Iris Energy are able to stabilize local power grids. They effectively act as a flexible energy source, absorbing power when it’s plentiful and conserving when it’s scarce. This symbiotic relationship not only maximizes the use of renewable energy but also casts miners in the role of problem-solvers for grid stability, often receiving incentives for their contributions​​.

Bitcoin mining computers 58 times more efficient

Bitcoin mining computers 58 times more efficient
Bitcoin mining computers 58 times more efficient

The evolution towards energy efficiency is also highlighted by the fact that bitcoin mining computers are now 58 times more efficient than they were eight years ago. The improved engineering of mining facilities and the strategic sourcing of power contribute significantly to this increase in productivity​​. This leap in hardware efficiency is complemented by strategic underclocking techniques, which enable mining the equivalent of 1.3 bitcoin for the energy typically required to mine a single one, as practiced by CleanSpark​.

The industry is also leveraging renewable energy in innovative ways. A new hybrid model has emerged where bitcoin miners purchase energy when it is in surplus, such as from wind and solar sources in West Texas, and then draw from the grid when needed. This model not only makes renewable energy more economical but also provides a revenue stream for energy that would otherwise be wasted​​.

Furthermore, the mining sector has found a niche in flared gas mitigation. Companies are capturing waste methane from oil wells—a natural byproduct of oil extraction—and using it to power their mining operations. This approach offers a controlled burn of the gas, reducing emissions and effectively utilizing a waste product that would otherwise contribute to greenhouse gas levels​​.

The bitcoin mining industry is not just adapting to a new landscape of environmental responsibility and energy cost but is actively rewriting its narrative. By embracing technologies that enhance energy efficiency, engaging in practices that repurpose waste, and forming strategic partnerships that stabilize power grids, bitcoin mining is proving that sustainability and profitability can indeed go hand in hand. These advancements are setting new industry standards and paving the way for a future where the profitability of bitcoin mining is intrinsically linked to its ecological impact.

Where are today’s Bitcoin miners mostly located?

The major Bitcoin mining countries, as measured by hash rate, which indicates the speed at which computations occur, are:

  1. United States: 35.4% of the global hash rate.
  2. Kazakhstan: 18.1%.
  3. Russia: 11.23%.
  4. Canada: 9.55%.
  5. Ireland: 4.68%.
  6. Malaysia: 4.58%.
  7. Germany: 4.48%.
  8. Iran: 3.1%.

It’s important to note that the figures for Germany and Ireland might be inflated due to redirected IP addresses through VPNs or proxies, and there’s little evidence of large mining operations that could justify these figures.

The precise number of Bitcoin mining companies in the hands of governments is not publicly disclosed or verified. However, there are indications of government involvement in Bitcoin mining in various countries. A White House adviser, Whit Gibbs, suggested that the U.S. government might be involved in Bitcoin mining, although the statement was not definitive. He mentioned that mining activity has been happening in the United States since 2013. It’s also known that countries like El Salvador and Venezuela are engaged in Bitcoin mining​​​​. This information suggests that while there may not be a large number of openly government-owned Bitcoin mining companies, several governments are involved in the industry to some extent.