Bitcoin mining is about to become greener, thanks mainly to Elon Musk. His company, Tesla, is teaming up with Jack Dorsey’s payments platform, Block, and blockchain technology company Blockstream to build a solar-fueled bitcoin mining facility in Texas.
The bitcoin mine will rely on solar and battery power provided by Tesla, comprising 3.8mw of a solar photovoltaic cell unit combined with a 12mw battery Megapack.
According to cryptographer and Blockstream co-founder Adam Back, considered one of the early bitcoin pioneers, the solar-powered facility will prove that bitcoin mining at scale can be an environmentally friendly endeavor.
Back explained to CNBC that the bitcoin mining farm will include the creation of an open dashboard that will be open to the public and reveal the data associated with the project’s performance in real-time.
The dashboard will show how much power is used and the number of bitcoin mined. These metrics will be drilled down further to offset the times when the sun is not shining.
We're excited to share our collaborative effort with @Blocks to build a fully solar-powered #BitcoinMining facility has begun.@Tesla photovoltaics & Megapack will power the 30 PH/s facility, aiming to show the world 100% zero-emission #Bitcoin mining at scale is viable. ☀️? pic.twitter.com/C1YVyn5ktS
— Blockstream (@Blockstream) April 8, 2022
Mining secures the blockchain so that bitcoin cannot be doubly spent and creates new bitcoin. Mining is an energy-intensive endeavor through which miners devote their computing power to solving complex equations on the blockchain to verify transactions.
According to The New York Times, bitcoin mining consumes 91 terawatt-hours of electricity each year, surpassing the power used by Finland’s population of 5.5 million.
Fossil fuels provide much of the electricity used in bitcoin mining due to their prevalence in the existing power grid. By turning to solar and storage tech, bitcoin is lessening its dependence on fossil fuels like coal and petroleum.
Image by The NY Times/EIA/Cambridge Bitcoin Electricity Consumption Index
Choosing Texas as the location for the new Tesla Gigafactory is no coincidence. West Texas is the leading renewable energy generator in the United States, thanks to an abundance of wind and solar. Bitcoin miners expect to harness some of the untapped wind and solar power available in the factory’s remote location.
Musk’s involvement is no coincidence either, as he is the catalyst that sparked the environmental debate surrounding bitcoin mining in the first place.
Last year, after announcing Tesla would support bitcoin payments, Musk reversed the decision, saying that the company had grown worried about the use of fossil fuels, particularly coal, to mine bitcoin. He later revealed that Tesla would resume bitcoin payments when the mining energy mix improved.
The new bitcoin mining facility is scheduled for completion in 2022. If it proves successful, the trio of companies involved will expand the renewable power sources to include wind.
With inflation hovering at a four-decade high, bitcoin is currently in the limelight. Similar to gold, the leading cryptocurrency is designed to be a hedge against inflation given its limited supply — no more than 21 million bitcoin can ever be mined.
Still, the price of bitcoin has been down about 13% in the past seven days.
BTC 30-day chart | Image by TradingView
Using sustainable energy to mine bitcoin could eliminate one deterrent for newcomers interested in entering the market.