New regulations mean that companies which engage in Bitcoin mining must prove carbon neutrality.
In the world of Bitcoin mining, the Proof of Work model has created new dissatisfaction as leaders and investors pay greater attention to environmental, social, and legal factors. Many cryptocurrency miners are focusing on environmentally friendly practices by acquiring carbon credits, though some claim that this is not enough to ensure eco-friendly mining.
For example, the Canadian businessman Kevin O’Leary said that he usually indexes public mining companies like Marathon Digital Holdings, Riot Blockchain Inc., and others. But he warned that as soon as these companies announced that they were carbon neutral through the use of carbon credits, their stocks dropped drastically. O’Leary believes that this is due to fear over planned audits of carbon credits. He asserts that carbon offsets aren’t auditable.
Bitcoin mining and data centers
So that zero carbon emissions from mining can be achieved, Bitcoin miners should build next to data centers, which would allow mining companies to efficiently use the extra energy discharged from the data centers for mining Bitcoin.
For example, the company Bitzero has used this model in Norway for two years. Bitzero has forged cooperation with the local government, which releases unused hydroelectric energy for Bitcoin mining. Bitzero provides fixed data centers built from local sustainable materials with heat capture technology.
The company Argo Blockchain plans to open a data center in west Texas, where they will conduct mining operations. While Argo isn’t aiming for zero carbon displacement, the general manager said that the company’s goal is to be carbon neutral.
Just as the companies Argo and Bizero are using renewable energy for mining, other companies, such as energy and gas companies, are establishing operations in places where extra energy is emitted.
For example, for a year, energy producer ExxonMobil has been quietly mining Bitcoin in the Bakken region of North Dakota as part of a plan to lower emission from burning gas.
A typical well in Bakken produces oil, but it also produces natural gas, which is usually burned or released into the atmosphere. Instead of burning the gas, Exxon is working with Crusoe Energy to capture the gas and direct it to generators where bitcoin is mined.
Zero carbon footprint
While environmentally-friendly Bitcoin mining is a hot topic right now, some say that the initiatives linked to zero carbon emissions are critical issues for miners who wish to stay in the market.
In New York, a proposed bill would limit Bitcoin mining operations. In Kazakhstan the government has proposed regulations for cryptocurrency mining operators that would require them to disclose their electricity use and “technical specifications” before they could be connected to the electrical grid.