TL;DR Breakdown
- Blockstream and Block break ground on a solar-battery Bitcoin mine in Texas powered by Tesla Inc.
- West Texas creates a haven for alternative energy supply.
Tesla Inc., payment firm Block Inc., and blockchain firm Blockstream Corp. will work together to mine Bitcoin using solar power in Texas. According to Adam Back, the CEO of Blockstream, the three companies will collaborate to change the outlook of mining Bitcoin. Back said that Tesla is building a solar power infrastructure and providing its Megapack batteries.
Tesla collaborates with crypto entities to mine Bitcoin using solar power
Last year, executives announced the collaboration when Block (formerly known as Square) committed $5 million to the venture. According to Blockstream, the building will be complete by the end of 2022.
Thanks to Tesla photovoltaics and Megapack battery technology, the solar mining endeavor will be entirely powered by renewable energy. The 3.8 megawatts (MW) Tesla solar array and 12 megawatt-hours (MWh) battery will provide 30 petahashes per second of mining power.
We're excited to share our collaborative effort with @Blocks to build a fully solar-powered #BitcoinMining facility has begun.@Tesla photovoltaics & Megapack will power the 30 PH/s facility, aiming to show the world 100% zero-emission #Bitcoin mining at scale is viable. ☀️🔋 pic.twitter.com/C1YVyn5ktS
— Blockstream (@Blockstream) April 8, 2022
Considering that the facility will only operate at a fraction of capacity, it will be small compared to the 300 MW operation RIOT Blockchain has constructed at Whinstone U.S., a former Alcoa aluminum plant in Rockdale, Texas. Moreover, when RIOT Blockchain’s 100-acre site gets fully functional, it will generate 750 MW of power.
To put it into perspective, bitcoins get generated by cryptocurrency miners, who compete to solve complex mathematical puzzles using high-powered computers that consume a lot of energy. Tesla stopped accepting Bitcoin for vehicle purchases in May 2021, citing environmental concerns. As a result, the three firms set out to develop an ecologically beneficial technique for mining Bitcoin.
However, Blockstream and its partners haven’t necessarily intended to construct the largest North American Bitcoin mining operation. They intend to demonstrate that it is feasible with all renewable energy. At the current Bitcoin price of $43,676.41, the mine could create around 4.11 BTC every month using current equipment.
“This is a step to proving our thesis that bitcoin mining can fund zero-emission power infrastructure and build economic growth for the future,” Blockstream co-founder and CEO Adam Back told CNBC at the Bitcoin 2022 conference in Miami.
To that end, Blockstream intends to maintain a public dashboard so that individuals may track the output of its power plant and Bitcoin mining. A future release will also show information about system availability, power storage, and solar energy generated by the Tesla array.
Improving global economics through green energy
Elon Musk, the CEO of Tesla automobile manufacturer and Bitcoin miner, has long called for more Bitcoin mining to be powered by sustainable energy.
Tesla Solar + Powerwall battery enables consumers to be their own utility
— Elon Musk (@elonmusk) April 22, 2021
In the United States, West Texas is a haven for alternative energy. “You have this ideal combination of both sun quality and wind speed in West Texas,” Lancium Executive Vice President Shaun Connell said.
However, much of that wind and solar power gets focused in isolated state regions. There’s little incentive to develop renewable infrastructure to capture this energy since there’s no financial benefit.
However, Bitcoin miners offer a financial incentive to install and improve the infrastructure, which has long been volatile. Miners provide demand to these semi-stranded assets and make renewable energy in Texas competitive.
The problem is that West Texas has a capacity of 34 GW, a demand of 5 GW, and only 12 GW of transmission. Consider Bitcoin miners to be temporary consumers who maintain the energy assets in operation until the grid can absorb them completely.
Back said that if the project is successful in its pilot stage, Tesla and the companies involved would add wind power to the mix and expand the entire project. Blockstream explained that an important goal is to improve Bitcoin’s network robustness by diversifying cryptocurrency energy supplies.
Bitcoin mining has long been a target for its alleged carbon impact. Last week, Greenpeace, the Environmental Working Group, and Ripple‘s Chris Larsen launched a campaign to move away from proof-of-work, which consumes a significant amount of electricity.
“Bitcoin is not the question; Bitcoin is the answer,” said Back, noting that Bitcoin can serve as a baseload electricity consumer, making sustainable energy feasible and allowing for additional investment in renewable energy assets.
