With energy prices soaring and Bitcoin’s value well below its all-time high, many crypto miners have been forced to reevaluate their entire business models. It’s no secret that Bitcoin mining is one of the biggest drains on energy resources today with mining rigs consuming an amount of power that exceeds entire nations.
Bitcoin’s proof-of-work model is the main culprit here. Since multhiple miners are competing for a single reward, 99 percent of the work that gets done is simply lost. This might not have been a problem when it was a niche market, but as its popularity has exploded this waste has grown exponentially. At the end of the day, a single Bitcoin transaction requires as much energy as 1.2 million Visa credit or debit card transactions.
With that kind of power bill, it’s little wonder that miners of all scales are desperately looking for new power sources; and they aren’t the only ones. The race for renewable energy is a leader in innovation right now with everyone from individuals to nations scrambling to meet their needs.
And sometimes, inspiration can come from the strangest places.
One Man’s Trash…
It’s impossible to talk about power consumption without talking about emissions. As it stands, global crypto mining accounts for as much CO2 emissions as all diesel fuel used in railroads in the US. That’s certainly a massive impact, but it’s nothing compared to other sectors. In fact, there’s a single product that creates nearly 15 percent of global greenhouse gas emissions; cattle.
The methane emitted from domestic cattle is one of the largest single contributors to greenhouse gasses in the atmosphere today. The problem has actually gotten so bad that some nations—like Ireland—have had to consider culling millions of cattle in order to meet emissions targets. This plan has, unsurprisingly, upset farmers, environmentalists, and steak lovers worldwide. As farmers would be the first and hardest hit by such a drastic move, many have been trying to find new ways of reducing, offsetting, or even utilizing, their emissions.
…Another Man’s Treasure
Enter Tom Campbell; Irish dairy farmer, crypto miner, and environmental trailblazer. Faced with rising energy costs and a desire to curb his family’s greenhouse emissions, Tom spent £3 million to convert his farm into an anaerobic digestion reactor.
Put simply, anaerobic digestion is a novel process for creating power from decomposing organic material. Materials like manure, plant trimmings, and food waste can all be placed into a chamber known as a “reactor” where bacteria break down the material in an oxygen-free area resulting in something called “biogas” which is primarily composed of methane, CO2, and hydrogen sulfide. Essentially, this product is functionally identical to natural gas and can be used in any existing infrastructure for heating, electricity, or even vehicle fuel.
Reducing carbon footprint is a big topic not only globally, but within the crypto-niche as well. In this example, we have a way of using it as a fuel, while in the industries like iGaming, where bitcoin slots online platforms are gobbling up much electrical power, and alternatives like this could lower the emissions further, instead of burning fossil fuels.
On his farm, Campbell produces enough power to run nearly 500 homes and uses much of the power to run his farm and a few surrounding areas. It’s estimated that if only 41 percent of Irish farmers adopted this practice, the power generated could be enough to power the entire nation.
Turning Brown Into Green
So, what does this have to do with Bitcoin? Well, it seems that Mr. Campbell is also an avid crypto miner. Dubbed “The Bitcoin Farmer” by a documentary, he uses much of his excess power to power a genuinely impressive—if small-scale—Bitcoin mining operation. On the farm, Tom and his team run 35 mining rigs off of the excess free energy and they mine a single Bitcoin approximately every 10 weeks. That might sound slow, but again, it’s all just extra on top of the actual farm and power station that he’s running.
The fact that this power consumption is taken from excess power—i.e. power that, for whatever reason, cannot be offloaded to the larger grid—means that anything mined on Campbell’s farm is pure profit.
A Bandage, Not a Cure
To be clear, anaerobic digestion is hardly a silver bullet for Bitcoin’s energy problem. At the end of the day, any power being used to mine Bitcoin is power that isn’t being used somewhere else. If Ireland’s energy grid were improved, then Campbell would be able to offload more of his power and his mining would be reduced. However, the technology at play here is absolutely revolutionary and is likely to impact the future of small-scale local energy production; particularly in rural areas.
Ultimately, unless Bitcoin follows Ethereum in transitioning to a proof-of-stake model, the coin’s energy consumption problem isn’t going to change. As has long been the case, though, change in these sectors will only be driven by profit, and as long as there’s still money to be made doing it the “old-fashioned” way, that’s likely how it’s going to stay.