Bitcoin miners are assisting oil companies in reducing flaring by running generators on natural gas that would otherwise be burned.
The environmental impact of Bitcoin (BTC) mining is a contentious topic in the blockchain community that comes up from time to time. Elon Musk, CEO of Tesla, caused a sharp correction in the cryptocurrency market last year when he tweeted that Tesla would abandon plans to accept BTC, citing “rapidly increasing use of fossil fuels for Bitcoin mining and transactions.” However, according to a recent CoinShares report, despite the widespread use of coal, oil, and gas for Bitcoin mining, the network accounts for less than 0.08 percent of global CO2 emissions.
During an exclusive interview, Kristian Csepcsar, chief marketing officer at Slush Pool, the oldest Bitcoin mining pool, discussed what he believes are current misconceptions about the environmental impact of Bitcoin mining. When asked about the disadvantages of mining Bitcoin with electricity derived from oil and gas, Csepcsar says there is more to it than meets the eye:
“We’re literally burning the gas into the atmosphere just because it’s not economical to do anything with it. Instead, we can put it into a motor to produce electricity and use that to mine Bitcoin.”
Flaring is the process of burning excess natural gas generated during oil extraction due to a lack of pipeline infrastructure to transport it to market.
Bitcoin miners in the United States and Canada have recently discovered ingenious ways to funnel natural gas to generate electricity rather than simply burning it into the atmosphere, thereby solving a critical environmental problem.
Csepcsar, on the other hand, is sceptical of certain renewable Bitcoin mining sources, referring to solar energy as “marketing noise.” As he put it:
“On our blog, we published research that we are not big promoters of solar mining; when you calculate the profitability, it’s not that good; it’s a very tough business.”
Cespcsar goes on to say that roughly 70% of all solar panels are manufactured in China, and that there hasn’t been much research on the environmental impact of the manufacturing process:
“Producing them creates a lot of harmful chemicals. And nobody talks about that. Everyone just thinks that the solar panels grow on trees, and then the sun shines on them. But, no, the process of creating them is brutal.”
Finally, Slush Pool does not have metrics on the type of energy used by its Bitcoin miners. When asked why this is the case, Cespcsar responded in an unexpected but perhaps true to the philosophy of decentralisation and privacy:
“We don’t want to look at that as a pool operator. In order to have those numbers, we would need to KYC our miners, conduct audits on their operations, or even filter transactions [for analytics]. That’s not the ethos we want to keep.”