The the gas bubble is feeding the speculative Bitcoin bubble

By February 1, 2020 Bitcoin Business
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gas flaring in Texas

Instead of flaring off gas, they are burning it to run computers that mine bitcoins. Is this any better?

TreeHugger has often complained about the power consumption of mining bitcoins. Right now, according to the digiconomist, Bitcoin is consuming 73.68 terawatts of electricity every year, as much as all of Austria, and is has a carbon footprint of 35 million tonnes of CO2, about the same as all of Denmark. It's enough electricity to power 6,822,107 American homes.

The numbers for a single transaction are even more ridiculous; the energy needed to mine just one bitcoin could power 22.06 houses for a day, and has a carbon footprint of 309.99 kilograms of CO2, my carbon budget for 45 days.

Bitcoin energy consumption
Bitcoin energy consumption/ Digiconomist/via

All this electricity, all this carbon dioxide, for what? What are they good for? According to Bloomberg, mostly speculation. One source said 90 percent of all trading is speculation. We are cooking the planet for speculation.

And now, we learn that Bitcoin miners are setting up in the Permian Basin in Texas, where natural gas is a byproduct of fracking for oil and they are flaring or burning it off. So Crusoe Energy Systems has developed a small gas-fired one-megawatt generator system with a box full of computers so that they can convert that natural gas into carbon dioxide and bitcoins. According to Bloomberg, 70 of these units would consume 10 million cubic feet of gas per day. According to Denver Business Journal,

With the agreement of an oil and gas well owner, Crusoe Energy connects a catalytic converter and generator to the natural gas from the well, cleanly turning it into electric energy powering the computer servers mining Bitcoin. The well owner gets free emissions reduction at a well where the natural gas would typically be flared off into the atmosphere. Crusoe receives free energy with which to mine Bitcoin.

“It’s a very creative way to solve an environmental and economic problem for the oil and gas industry,” says one investor. “It’s easier to move data than a remote commodity,” says the Crusoe founder.

But how does this solve an environmental problem? They were burning the gas before. They are burning the gas now. The only difference is that they are getting a Bitcoin out of it.

So many articles are calling this a solution to flaring, but really, the gas bubble is feeding the speculative bubble and we all lose.

TreeHugger has often complained about the power consumption of mining […]

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