The mining metaphor is apt because bitcoins are created through specialized computers looking for the correct codes hash keysjust like digging for gold. That electronic digging takes more and more power as more and more people dig for that virtual gold. Sebastian Deetman calculated in that mining would require as much electricity by as the entire nation of Denmark currently consumes. With an approximately year discovery cycle to mine all 21 million bitcoins, mining power demand will go up exponentially.
So what to do if we care about the power of blockchain and cryptocurrency as well as protecting our climate and our environment? Well, one thing we can do is consider the potential for environmentally friendly power for mining. I conclude that it can be both very profitable and far better for the environment than some other options. I first considered combining solar power with Bitcoin mining due to my work in solar power development and my recognition of how difficult it can be to obtain a power sales contract.
There are many difficult aspects of solar power development, but obtaining the sales contract q8-6326-a1-hr131 now generally the most difficult part of the process, mining because there are so many market participants chasing too few contracts.
Mining Bitcoin is one way to obtain significant revenue — potentially far greater revenue than under normal power sales contracts to the grid — without needing any sales contract at all. Bitcoin mining profitability is determined by the cost of electricity more than any other factor. So if solar power is cheaper than buying grid power, it can make sense to combine on-site solar power with mining operations. To date, I am not aware of any significant mining operations using low-cost solar power at scale.
But this resource is far more geographically limited than solar power, which can be and is being developed all around the world. The bottom line is that solar-powered Bitcoin mining operations can be highly profitable and enjoy payback times as short as a year or two. After that, Bitcoin revenue comes with almost zero ongoing costs for another 25 years or more for solar farms q8-6326-a1-hr131 though the mining machines will need to be upgraded periodically.
There are bitcoin opportunities for obtaining very low-cost grid power, or even negatively-priced power, to increase mining profitability of solar mining operations.