Along a dirt road deep in Texas farm country, a company is building a power plant for the internet age that will be stocked with computers that generate new Bitcoins.
Unlike other mining operations, which consume large quantities of fossil fuels and produce carbon emissions, Argo claims it is trying to do something green. Peter Wall pointed to a row of wind turbines a few miles down the road as he led a tour of the construction site.
Mr. Wall said that the new facility would be powered by wind and solar energy.
Facing criticism from politicians and environmentalists, thecryptocurrencies mining industry has embarked on a rebrand effort to challenge the view that its electricity-guzzling computers are harmful to the climate. All five of the largest publicly traded coin mining companies say they are building or already operating plants powered by renewable energy, and industry executives are arguing that demand from miners will create opportunities for wind and solar companies to open facilities of their own.
The effort is partly a public-relations exercise and a genuine attempt to make the industry more sustainable after China began to crack down on the industry. A trade group called the Bitcoin Mining Council was formed last year to tackle climate issues after Musk criticized the industry for using fossil fuels.
Pickings or shovels are not involved in cryptocurrencies mining. The term refers to a verification and currency creation process. Powerful computers race one another to solve complex mathematical problems that require quintillions of numerical guesses a second. New coins are given to miners as a reward for keeping the computers running.
In the early days of the digital currency, an enthusiast could mine coins by running software on a laptop. The amount of power needed to generate Bitcoin has increased as digital assets have become more popular. Researchers estimate that a single transaction requires more than 2,000 kilowatt-hours of electricity or enough energy to power the average American household for 73 days.
Some miners are reviving broken-down coal plants or using low-cost natural gas to power their computers. According to a study in the journal Joule, the emissions of Greece may be equivalent to the emissions of the world.
The use of green energy sources on the network dropped to an average of 25 percent in August 2021, from 42 percent in 2020. The industry says its average renewable use is closer to 60 percent. China cut off a source of cheap hydropower as a result of its crackdown. Alex de Vries is one of the authors of the Joule study. The sun shines only part of the day, and wind speeds can vary greatly.
Climate Forward There’s an ongoing crisis — and tons of news. Our newsletter keeps you up to date.If a miner wants to maximize the profit, they will put their machine wherever it can run the entire day.
Environmentalists have long been upset by the ballooning energy use of Bitcoin. The strongest criticism came from Mr. Musk, the founder of the electric car company, who said in May that his company would no longer accept cryptocurrencies because of the increasing use of fossil fuels.
The mining industry was in crisis mode. The chief executive of MicroStrategy got in touch with Mr. Musk to discuss the issue of climate change. A group of mining executives met with Mr. Musk.
He wanted to make sure that the industry was on the side of sustainable living. Figure out how much you use.
After the call, Mr. Saylor set up a forum for the industry to share ideas and coordinate environmental strategy. One member, TeraWulf, has pledged to use more than 90 percent zero-carbon energy. A retired coal plant in upstate New York is one of the projects in the works.
The chief executive of TeraWulf said that everyone he talks to now is talking about carbon neutrality.
Financial priorities and technological barriers are preventing a complete shift to renewable power. In late 2020, Marathon, one of the largest publicly traded mining companies, started mining at a coal-powered plant in Montana, citing the easy access to cheap energy.
The old steel mill in the town of Hennepin in Illinois has been turned into a mining facility. Spencer Marr, a former lawyer, founded the company to promote clean energy. Half the power comes from fossil fuels.
Mr. Marr said that it was a compromise that they had to make.
There is a glossary. Cryptocurrencies have gone from a curiosity to a viable investment, making them almost impossible to ignore. Let us help you with the terminology.
There is a virtual currency called th digital currency called th digital currency is called th digital currency is called th digital currency is called th digital currency is called th digital currency is called th digital currency is called th digital currency is called th digital currency is There is a digital token that can be sent anywhere in the world. This form of digital currency is stored and moved on a payment network.
There is a system for storing data called the Blockchain. A database maintained communally that reliably stores digital information is known as a blockchain. Non-currency-based companies and governments are trying to use the same technology that was used to store all of the Bitcoins.
It is possible to pay with corp coin. The first major company to list its shares on a U.S. stock exchange is Coinbase, a platform that allows people and companies to buy and sell various digital currencies.
There is a type of finance called cryptocurrencies. The development of cryptocurrencies spawned a parallel universe of alternative financial services, known as Decentralized Finance, or DeFi, which allowed businesses to move into traditional banking territory, including lending and borrowing.
More than two dozen companies have moved to Texas in the last few months. The state has an unusual incentive structure that is well suited to the new industry: the Texas grid operator offers what amounts to a discount to companies that can quickly unplug when electricity demand spikes statewide, allowing energy to flow to ordinary homeowners. The incentive for turning on or off the mines is very easy to take advantage of.
That deal was part of the attraction for the London-based company, which runs two other mines in Quebec using mostly hydropower. Mr. Wall said that Argo was drawn to the green energy in West Texas. The facility outside Lubbock will be connected to the western sector of the Texas energy grid, where most of the electricity comes from wind and solar infrastructure.
Mr. Wall can't guarantee that the new center won't have a carbon footprint. Buying energy directly from a renewable power company would be required.
He said that a lot of the renewable energy producers are skeptical of thecryptocurrencies.
He said that in the future, Argo will build its own solar panels on site in Texas and broker deals with local renewable energy companies to buy energy directly.
The mining sector is a topic of debate in the broader community. Some in the industry are pushing to build new cryptocurrencies on a different system that uses less energy.
Mr. Wall said he was open to experimentation with an alternative system. He believes in the long-term potential of the digital currency, though he wishes that miners were called something else.
He is unlikely to win that battle. He said that companies will keep mining even in the face of backlash.
It is just going to happen. He said that it is a reality and that it needs to be done in an environment friendly way.
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