Coal residue to mine Bitcoin: Stronghold Digital Mining
Is BTC bitcoin mining becoming greener than the rest of the world?
The vast amounts of energy required to mine Bitcoin regularly spark debate. Heavy energy bill and negative environmental impacts, is this the price to pay to obtain bitcoins? Should consensus be banned from Proof of Work?
While governments are working on the question, the American company Stronghold Digital Mining thinks it has found the answer. This Pennsylvania company claims to have discovered an ecological method of mining cryptocurrencies. This would not only preserve the environment but would clean it up. It consists in using the residual waste of coal.
- The Stronghold Coal Ash Method
- Better Understand Bitcoin Mining
- Bitcoin Mining and Renewable Energies
The Stronghold Coal Ash Method
Coal ash is a by-product that results from burning coal. It is harmful to the environment. Indeed it seeps into groundwater and damages waterways. In addition, it contains heavy metals considered carcinogenic.
The Stronghold company collects waste from old coal mines. Then it treats them in its waste treatment plant. The ash is separated from all the residues. It is then crushed and sent to a boiler room. Indeed, Stronghold purchased and recommissioned a coal-fired power plant. The electrical energy thus created powers the nearby Bitcoin mining farm.
Greg Beard, CEO of the company, emphasizes the relevance of coexisting a power plant and a mining farm. It reminds us how much such an activity is energy-intensive.
In a recent statement, Stronghold claims to remove approximately 200 tons of waste coal for every bitcoin mined. However, the company does not say anything about the new waste produced by the thermal power plant. And some environmentalists denounce the return to service of thermal power plants.
To go beyond the controversies, it would be interesting to look at a study published on January 25, 2022. It reveals that in 2021, Bitcoin accounted for only 0.08% of global carbon dioxide (CO2) emissions. . Would we therefore have overestimated the whole problem around the energy consumption of Bitcoin mining?
Better Understand Bitcoin Mining
Bitcoin mining is done through a method called Proof of Work consensus. It requires prior “work”. So to win the right to verify transactions, minors compete. The system presents them with a complex mathematical problem.
The challenge is to solve it as quickly as possible. The miners then solicit the computing power of their computers. They test a multitude of possibilities until they get the solution. The fastest then earn the right to process the transactions contained in a block. They verify the transactions and validate the addition of the block to the chain. This generates the creation of bitcoins intended to reward miners. They can then resell them on cryptocurrency exchanges.
A few numbers to know. A block is mined approximately every 10 minutes. The number of bitcoin units is limited to 21 million, of which 19 million (90%) are already in circulation. Only one bitcoin will remain to be mined in 2104.
Also remember that the generation of bitcoins is halved every four. Since 2020 and until 2024, each block validation generates 6.25 bitcoins. These bitcoins are the bounty distributed to miners. In particular, it allows them to pay their colossal energy bills.
Bitcoin Mining And Renewable Energies
When the Bitcoin blockchain was created, a miner could use a simple smartphone. Today mining requires the installation of huge warehouses filled with supercomputers. The increase in difficulty plays a regulating role in the manufacture of bitcoins.
The CCAF (Commission de Contrôle des Affaires Financières) has carried out a study on the use of renewable energies. It shows that 76% of miners use renewable energy at least partially. 62% turn to hydraulics, 17% to wind and 15% to solar.
In the United States, Stronghold Digital Mining is not the only company to reactivate power plants. In 2021, the Bitcoin Mining company brought back into service a hydroelectric power station in New York State dating from 1897. This power station, which is the oldest in the world, is now used to extract Bitcoin.
In the field of solar energy, we can note the recent personal initiative of Peter Egyed, a cryptocurrency enthusiast. He tested a homemade mining station. It works with solar energy and off the traditional electricity grid. “I earned 426,000 satoshis (0.00426048 Bitcoin) in the last 7 days while using an additional 62 kWh per day,” he tells us. Peter Egyed therefore earned about 174 dollars in one week. Its objective is to demonstrate the profitability of a solar-powered mining solution.
Like Stronghold Digital Mining, many miners are testing innovative solutions. The objective is to reduce the energy bill and the environmental impact of their activities. The survival of Bitcoin mining depends on it when legislators are quick to ban the use of Proof of Work.
Between prohibition and encouragement? Some propose creating a special bonus for miners using solar energy to develop its use.