Ryze Recap 9/8: How Bitcoin Mining is Curbing Natural Gas Flare Emissions

Sustainability in Mining, and Bringing Hashrate to the USA

Good morning Ryze readers! It’s Tuesday, September 8th. We hope you enjoyed your Labor Day weekend.

If you’re new here— Ryze Recaps is a newsletter synthesizing the biggest news Bitcoiners need to know. We’ve got one main story for you today.

How Natural Gas Flaring is Being Repurposed for Bitcoin Mining

Natural gas, a fossil fuel, is one of the most commercially important naturally-occurring chemicals. While you may know it as the blue-tinged flame that just cooked your breakfast, it’s also one of the most vital sources of heating and electricity in the world.

The production and extraction of this vital resource results in flaring— the controlled burning of natural gas during production and processing. Flaring results in methane gas emissions, which are 26x more harmful to the environment than the carbon dioxide your car emits. Flaring is one of the biggest drawbacks of natural gas production.

Equinor, the 11th largest oil and gas company in the world, is repurposing natural gas flares to power Bitcoin mining rigs. What is essentially a waste product is being used to secure the Bitcoin network.

Equinor, the second-largest natural gas supplier in all of Europe, will harness the flaring outflows of its operations in North Dakota to power digital flare mitigation technology provided by Crusoe Energy Systems.

Crusoe is a Colorado-based technology company that has created the technology that enables oil and gas companies such as Equinor to capture gas that would’ve been flared off and use it to power Bitcoin mining rigs specifically designed for oilfields. This technology not only reduces waste and curbs emissions, but it also provides an additional revenue stream for these oil and gas companies through Bitcoin mining.

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What they’re saying:

“Mining cryptocurrency requires a lot of electricity to power computers, while a valuable commodity is wasted, and carbon emissions are created when we flare. By connecting these inverse pains, we can satisfy both needs with no cost to market expense.” - Lionel Ribeiro, Equinor

Why it matters:

  • Bitcoin mining was previously thought of as detrimental to the environment and a potential accelerant for man-made climate change because of the amount of energy the network consumes. However, in recent years, a growing portion of the electricity being used to power Bitcoin mining stems from renewable energy sources. In China, the vast majority of mining operations are powered by hydroelectric plants, but as we covered this weekend, this can have negative consequences. Upstream Data, a company similar to Crusoe, operates Bitcoin mining farms on Canadian oil fields. What Equinor and Crusoe are doing by harnessing natural gas flares is a continuation of this trend towards more sustainable ways to mine Bitcoin.

  • Companies like Equinor are not only helping mining become more sustainable, they’re also bringing hashrate to the United States. Currently, a majority of mining hashrate— a measure of the amount of computing power used to secure the Bitcoin blockchain, stems from China. This has led to growing concerns as global tension regarding China escalates. In response, companies like Layer1 and Whinstone are building out America’s Bitcoin mining capabilities in West Texas, New York, Nebraska, and Georgia. America is the largest producer of energy in the world, presenting the opportunity to harness surplus energy to overtake China in what has been dubbed the “global hash war.” Equinor and Crusoe are joining the fight, and we’ll be watching to see how much of an impact this application of gas flaring has on the mining industry.

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Written by Ryze— buy the dip for Bitcoin, automatically #BTFD