Here’s how blockchains are helping to advance the global energy grid
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Governments and environmentalists are quick to criticize the amount of electricity Bitcoin mining uses, but investors’ growing interest in crypto is leading to positive steps in the energy sector.
The blockchain industry’s impact on the energy sector has been a major source of controversy over the past five years. Governments and environmental protection advocates have routinely expressed concerns about the amount of energy required to keep the Bitcoin network secure. Data shows the network’s energy consumption now rivals the yearly energy consumed by some small countries.
While much of the debate has centered around the negative environmental impacts of Bitcoin (BTC) mining, the drive to maximize earnings from mining and integrate blockchain technology with the energy grid has also introduced new developments that have the potential to be beneficial in the long term.
Here’s a look at several developments that have arisen out of the demand for energy to operate blockchain networks and the positive effects cryptocurrency mining is having on the energy industry.
Recapturing wasted energy
One of the fastest-growing segments of the cryptocurrency mining industry is the monetization of historically wasted sources of energy such as natural gas that is flared at oil drilling facilities.
Discovering natural gas pockets is a common part of the oil drilling industry, and up until recently, this gas was typically burned in a process called “flaring” because the infrastructure needed for its collection was non-existent or there had not been sufficient demand for LNG.
As the value of Bitcoin rose over time, the search for inexpensive energy sources led to the installation of shipping containers filled with mining equipment at drilling sites that can utilize the energy generated from flaring to mine BTC.
While the process still results in carbon dioxide emissions, income is generated during the process and these funds could be redirected toward mitigating environmental concerns.
Most recently, several companies have been exploring the integration of mining via flared gas in the Middle East, which accounted for over 38% of the global flaring in 2020 and presented one of the biggest opportunities to turn wasted energy into value.
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