Solar panels are seen in this drone photo at the Impact solar facility in Deport, Texas, July 15, 2021.Solar panels are seen in this drone photo at the Impact solar facility in Deport, Texas, July 15, 2021.

Jack Dorsey's Block and Blockstream are breaking ground on a solar- and battery-powered bitcoin mine in Texas that uses solar and storage technology.

The facility will be powered by a 3.8 megawatt solar array and 12 megawatt-hour Megapack.

Adam Back, co-founder and CEO of Blockstream, told CNBC that he is a member of the cypherpunk crew.

People like to debate about the different factors that affect mining. Let's just prove it. Back said to have an open dashboard so people can play along.

The dashboard will show real-time metrics of the project's performance, including power output and total bitcoin mined. The company said a later version of the dashboard will include solar and storage performance data points.

Back said that this was a step to prove that mining for bitcoin can fund zero-emission power infrastructure and build economic growth for the future.

West Texas is home to a lot of renewable energy.

In West Texas, there is a perfect overlap between sun quality and wind speed.

There is a lot of wind and solar power in remote parts of the state. There isn't much reason to build out renewable infrastructure to harness this energy.

Enter miners. When these energy buyers co-locate with renewables, it creates a financial incentive for buildout and improves the economics of renewable power production, which has been fraught with volatility.

Castle Island Venture's Nic Carter said that miners provide demand for these assets and make them economically viable.

The constraint is that West Texas has 34 gigts of power, five gigts of demand, and only 12 gigts of transmission. When the grid is able to fully absorb the energy assets, you can think of temporary buyers like the miners.

The off-grid mine, which is expected to be completed later this year, highlights another key principle of the network: miners can do it from anywhere without local infrastructure.

The companies would add wind power to the mix and scale the project if the project proved profitable in its pilot stage.

There is 3.8 megawatts of solar and one megawatt of mining.

Adding wind to the mix would help balance out the downtime with solar.

Blockstream said that a key goal is to strengthen the network by adding more energy sources.

By collaborating on this full-stack, 100% solar-powered bitcoin mining project with Blockstream, we aim to further accelerate the synergy with renewable energy.