As governments aim to curb carbon emissions from gas flaring, Bitcoin data centers offer a way to use this energy instead of letting it go to waste, in return for the digital currency.
Gas flaring, a byproduct of fracked shale production, produces around 1 percent of global carbon emissions at present. Companies burn the gas off at the well site, rather than using it as an energy source, because of its unprofitable nature. The alternative option is simply to vent the gas into the atmosphere, releasing methane and adding to harmful greenhouse gasses that have a knock-on effect on the environment.
However, several companies are calling for an end to gas flaring within the next decade and looking to find other uses for this energy.
Bitcoin producers realized this gas could be a great source of energy for small, transportable cryptocurrency data centers. One of the biggest problems faced by digital currency producers is the high price of electricity needed to farm the currency. But if this energy can be found cheaper from a product that would not otherwise be used, it could present the perfect solution for both industries.
In 2019, it was discovered that Bitcoin required more energy than the entire country of Switzerland for mining. This figure increased in 2020 and it is estimated that the Bitcoin network consumes around 80 terawatt-hours per year.
But the swinging price of Bitcoin and the Covid-19 pandemic deterred oil companies from making a commitment until now. Bitcoin did not appear a viable long-term option due to its volatility, especially when the future of oil was also looking bleak in 2020. While some companies took the plunge and trialed a Bitcoin-for-gas program as early as 2019, this was a widely overlooked solution to flaring and venting.
Related: ExxonMobil Set To Outperform As Oil And Gas Prices Climb
Sergii Gerasymovych, the owner of a Bitcoin mining company, EZ Blockchain, reached out to oil and gas companies a few years ago to no avail. But The market conditions have changed, he explained. Now, every oil and gas company we reached out to in 2018 is calling us back because they see Bitcoin is making a lot of money.
Bitcoin is becoming increasingly attractive to companies looking to modernize and go digital with the price of the digital currency doubling during the last year, despite a pre-pandemic dip.
EZ blockchain has recently set up five Bitcoin mines on gas sites, the latest in Utah with independent gas company Wesco Operating Inc. Other companies using the innovative solution include Crusoe Energy Systems Inc., which has introduced low-cost/no-cost Digital Flare Mitigation programs with Bitcoin companies to put 20 data centers into action.
Other countries have also recognized the opportunity, with Russian companies developing similar projects. In January, Russian state-owned oil major Gazprom Neft has announced a successful pilot project that uses gas that would otherwise be flared to produce electricity to mine cryptocurrency at a Siberian drilling site.
Vekus was the first Russian cryptocurrency company to develop such an energy source for digital currency mining. Vekus used a shipping container to create an on-site mine, demonstrating the potential for digital currency mines to be placed on oil and gas sites around the country.
Russia is the worlds biggest gas flare producer, followed by Iraq, the U.S., and Iran, which in total accounted for 45 percent of global gas flares in 2017-2019.
Other cryptocurrency companies could make similar deals with oil and gas companies so long as they have proof of Work (PoW) option to process transactions. This could make digital currencies more sustainable in the long-term as electricity costs currently account for the majority of their production costs.
As oil and gas companies are feeling increasing pressure from regulators and governments to curb their carbon emissions over the coming decade, Bitcoin-for-gas could offer a simple solution to put an end to flaring and venting.
By Felicity Bradstock for Oilprice.com
More Top Reads From Oilprice.com:
Read this article on OilPrice.com
Originally posted here:
Could Bitcoin Solve The Oil Flaring Problem? - Yahoo Finance
- Bitcoin vs. Ethereum: 10 experts told us which asset they'd rather hold, and why - Markets Insider - May 9th, 2021
- Bitcoin (BTC USD) Cryptocurrency Price: Bank of England Warns of Full Losses - Bloomberg - May 9th, 2021
- SEC Chairman Gary Gensler says more investor protections are needed for bitcoin and crypto markets - CNBC - May 9th, 2021
- Forget Bitcoin: Here are The Crypto Assets To Follow - Yahoo Finance - May 9th, 2021
- Should you invest in Bitcoin or Ether? - The National - May 9th, 2021
- Downtown Josh Brown on bitcoin and wealth management - The Block Crypto - May 9th, 2021
- Mark Cuban: The 3 ways Ethereum 'dwarfs' bitcoin - CNBC - May 9th, 2021
- Metromile Will Embrace Bitcoin For Insurance Premium And Claim Payments - Forbes - May 9th, 2021
- FBI: Knoxville man paid hitman in Bitcoin to kill his wife - WATE 6 On Your Side - May 9th, 2021
- S&P Dow Jones brings bitcoin, ethereum to Wall St with cryptocurrency indexes - Reuters - May 9th, 2021
- Bitcoin Association releases 2020 annual report highlighting work and achievements advancing Bitcoin SV - GlobeNewswire - May 9th, 2021
- S&P Dow Jones brings bitcoin, ethereum to Wall St with cryptocurrency indexes - Yahoo Finance - May 4th, 2021
- 3 reasons why Bitcoin is on shaky ground after failing to retake $60K - Cointelegraph - May 4th, 2021
- Bitcoin (BTC) Attempts to Create Higher Low After Rejection - Yahoo Finance - May 4th, 2021
- Bitcoin Association releases 2020 annual report highlighting work and achievements advancing Bitcoin SV - WFMZ Allentown - May 4th, 2021
- Cryptocurrency Clamor: Paying Employees in Bitcoin Has Reached the Mainstream - JD Supra - May 4th, 2021
- More Than 1600 Participate In Mays Innovation Research Center Bitcoin Conference - Texas A&M Today - Texas A&M University Today - May 4th, 2021
- Bitcoin Rebounds After Hitting Lowest Level Since March - Yahoo Finance - May 3rd, 2021
- Bitcoin Crypto Dominance Declines as Ether Soars Past $3,000 - Bloomberg - May 3rd, 2021
- If You Bought $1,000 Worth of Bitcoin a Year Ago, Here's How Much You'd Have Today - The Motley Fool - May 3rd, 2021
- Charlie Munger 'hates' bitcoin's rise: 'disgusting and contrary to interests of civilization' - MarketWatch - May 3rd, 2021
- Will Bitcoin replace gold as the ultimate store of wealth? - ABC News - May 3rd, 2021
- Leak Reveals Millions Of PayPal And Robinhood Bitcoin Buyers May Soon Want To Make A Surprising Switch Amid Bitcoin Price Mania - Forbes - May 3rd, 2021
- Digital currency ether hits a record high, stealing bitcoin's limelight - CNBC - May 3rd, 2021
- Bitcoin Crash vs. Correction: Do You Know the Difference? - CoinDesk - CoinDesk - May 3rd, 2021
- Why Care About Bitcoin? Here's One Philosopher's Take - CoinDesk - May 3rd, 2021
- Bitcoin Is Number One Pick Asset Manager Confident BTC Will Take Him 'to the Top' in Stock Draft Competition Bitcoin News - Bitcoin News - May 3rd, 2021
- Bitcoin Taproot Upgrade Has Started Its Speedy Trial - CoinDesk - May 3rd, 2021
- Feds arrest founder of bitcoin mixer they say laundered $335 million over ten years - The Verge - May 3rd, 2021
- Bitcoin Illuminates Inflation In The Fog - Bitcoin Magazine - May 3rd, 2021
- Tesla Reports Record Earnings, With More Than A Bit Of Help From Bitcoin - NPR - May 3rd, 2021
- UBS Chief Economist Says 'Bitcoin Is Denied to Minority Groups Who Have Reduced Online Access' News Bitcoin News - Bitcoin News - May 3rd, 2021
- Ether Should Outperform Bitcoin Over the Long Run, Says JPMorgan - Yahoo Finance - May 3rd, 2021
- 19 Stocks With Exposure to Bitcoin - Barron's - May 3rd, 2021
- Mila Kunis warned Ashton Kutcher against investing in Uber and Bitcoin - Insider - May 3rd, 2021
- Over $200 billion wiped off cryptocurrency market in a day as bitcoin plunges below $50,000 - CNBC - April 23rd, 2021
- Bitcoin drops below $50,000, dented in part by rising U.S. tax worries - MarketWatch - April 23rd, 2021
- Behind Bitcoins Recent Slide: Imploding Bets and Forced Liquidations - The Wall Street Journal - April 23rd, 2021
- Bitcoin bears are stalking crypto prices --- here's how low they could go - MarketWatch - April 23rd, 2021
- Bitcoin is at its lowest level in nearly a month. 2 experts explain why they see more weakness ahead. - Markets Insider - April 23rd, 2021
- First Mideast Bitcoin ETF Aims to Raise More Than $200 Million - Bloomberg - April 23rd, 2021
- Why Bitcoin Is Making Its Way onto the Balance Sheet - ETF Trends - April 23rd, 2021
- Women Step Up Trading in Bitcoin, Other Cryptocurrencies - The Wall Street Journal - April 23rd, 2021
- Here's where you can shop with Bitcoin and other crypto - Yahoo Money - April 23rd, 2021
- Why is ethereum on a tear of late, outperforming bitcoin? - Mint - April 23rd, 2021
- Bitcoin Association appoints new ambassadors for Japan and the South Pacific to advance Bitcoin SV - PRNewswire - April 23rd, 2021
- Dogecoin Falls Below 20 Cents, Bitcoin Below $50K Amid Wide Sell-Off, But These Two Cryptos Are On A Run Today - Benzinga - April 23rd, 2021
- UK to explore issuing its own digital currency amid bitcoin boom - CNBC - April 23rd, 2021
- Bill Gates betting on total collapse of Bitcoin as cryptocurrency slumps: Analysts - Republic TV - April 23rd, 2021
- JPMorgan warns of bitcoin weakness as futures get liquidated - Economic Times - April 23rd, 2021
- Bitcoin rally this year is the start of going mainstream, not a bubble, says investor Bill Miller - CNBC - April 21st, 2021
- After a wild weekend, bitcoin could take a breather before the next move higher - CNBC - April 21st, 2021
- Bitcoin's sell-off by the numbers: Oppenheimer puts the latest drop into perspective - CNBC - April 21st, 2021
- During Bitcoins Latest Price Crash, Tether Premium Shows Where Money Went - Yahoo Finance - April 21st, 2021
- Bitcoins nosedive: What happened and whats ahead? - Fox Business - April 21st, 2021
- Mark Cuban says bitcoin is far from its market top: 'The opportunity for it to go much higher certainly exists' - CNBC - April 21st, 2021
- Visualizing the Power Consumption of Bitcoin Mining - Visualcapitalist - Visual Capitalist - April 21st, 2021
- Fund managers think bitcoin is in a bubble, but not equities - Mint - April 21st, 2021
- We're closer to a bitcoin ETF, 'but were not all the way there yet,' market analyst says - CNBC - April 21st, 2021
- Do You Need a Crypto Wallet to Store Your Bitcoin? - Motley Fool - April 21st, 2021
- Bitcoin Plunges, Taking Other Cryptocurrencies With It - Yahoo Finance - April 21st, 2021
- Avoid Overvalued Coinbase: Buy These 10 Best Crypto, Bitcoin Stocks Instead - Yahoo Finance - April 21st, 2021
- Bitcoin ETF From 3iQ and CoinShares, Canadas 4th, Begins Trading on TSX - Yahoo Finance - April 21st, 2021
- Federal Reserve Bank President Says Bitcoin Is Clearly a Store of Value Regulation Bitcoin News - Bitcoin News - April 21st, 2021
- FinanceFactbox: Bitcoin's march to the mainstream gathers pace - Reuters - April 21st, 2021
- GameStop and Bitcoin Renewed a Push to Digitize the Stock Market - The Wall Street Journal - April 9th, 2021
- Bitcoin exchange Kraken considers going public after record trading volumes in the first quarter - CNBC - April 9th, 2021
- At $60,000, Is Bitcoin Too Expensive? - Motley Fool - April 9th, 2021
- 'We've reached a tipping point' on bitcoin adoption, Fidelity's Tom Jessop says - MarketWatch - April 9th, 2021
- This Financial Advisor Thinks Bitcoin Could Be Headed for Mass Adoption - Motley Fool - April 9th, 2021
- Is there a future for bitcoin? An investor and a skeptic debate - The Verge - April 9th, 2021
- Fidelity Says Bitcoin Adoption Will Keep Accelerating 'We've Reached a Tipping Point' Featured Bitcoin News - Bitcoin News - April 9th, 2021
- The IRS wants to know all about your Bitcoin holdings --- and this court summons is a reminder - MarketWatch - April 9th, 2021
- Gold, Stocks, and Bitcoin: Weekly Overview April 8 - Yahoo Finance - April 9th, 2021
- BIGtoken to Host Webinar on Thursday, April 15, 2021 to Discuss Bitcoin 2021 and Beyond - Business Wire - April 9th, 2021
- Kevin OLeary says he will only buy bitcoin mined with clean energy, and none mined in China - CNBC - April 9th, 2021
- Ripple Granted Access to SEC Documents on Bitcoin, Ether in Ongoing XRP Fight - Yahoo Finance - April 9th, 2021
- Why the Market is Thinking About Bitcoin Differently - Visual Capitalist - April 9th, 2021
- Texas A&M Mays Innovation Research Center To Host Bitcoin Conference April 16-17 - Texas A&M University Today - April 9th, 2021
- Economist Says Bitcoin Isn't Too Big to Fail Warns BTC Can Only Establish Itself if Governments Allow It Regulation - Bitcoin News - April 9th, 2021