Bitcoins: a company buys a coal-fired power plant to power its mining machines

Since the concept was launched in 2008, cryptocurrency has steadily grown in popularity. Especially Bitcoin which can still boast of being the very first virtual currency. In recent years, more and more countries are open to the use of the latter, the State of El Salvador has even gone so far as to make it legal tender.

Today, Bitcoin mining is more relevant than ever, the number of transactions carried out is also constantly increasing. The problem is that it takes a phenomenal amount of energy given the size of its blockchain (366 GB in September 2021).

Just to give you a concrete idea, the New York Times recently revealed that cryptocurrency mining would consume 0.5% of the world’s electricity, much more than that of a small country like Finland. The needs are so great that a big Bitcoin mining company, the Stronghold Digital Mining holding company, decided to buy a coal plant to power its mining machines. And that’s not necessarily a good idea… Details!

First understand bitcoin mining

Cryptocurrency mining, also known as “Proof of work”, consists of solving a complex mathematical problem in order to validate, and therefore secure, a transaction on a blockchain network. To do this, cryptocurrency “miners” use the computing power of their computer to test a multitude of possibilities until they find the solution to the problem. Once this is done, miners are rewarded with Bitcoins (or other virtual currencies) which they can then trade using Bitcoin trading apps on the international market.

Thousands of machines to feed

Thirteen years ago, any computer, as long as it had an efficient calculation tool, could mine Bitcoins. Today, there are machines specially designed for cryptocurrency mining: RIGs or Asics. These are powerful machines that require a really large power source. Just imagine the electricity consumption of a mining company like the holding company Stronghold Digital Mining, which owns 1,800 RIGs!

A coal-fired power plant. Illustrative photo. Image credit: Shutterstock/guentermanaus

The company, for its part, decided to take the bull by the horns by acquiring an old coal-fired power plant in Pennsylvania (United States) with the aim of producing the energy needed to power its thousands of mining machines. A good deal for the holding company and its miners, but which is not to everyone’s taste, the partisans of ecology in mind.

Conservationists are concerned…

At a time when the Environmental Protection is at the heart of all concerns, individuals and companies are encouraged to turn to the use of clean energies. However, the coal plant purchased by Stronghold Digital Mining runs on fossil fuels, which are a form of polluting energy. Especially since the company has indicated that to supply its 1,800 RIGs, its brand new power plant will have to burn no less than 600,000 tonnes of coal waste per year.

These early company estimates have worried local conservationists, as the thermal power plant’s operations could not only contaminate surrounding waterways, not to mention the large amounts of CO2 it will emit. in the air.

… especially since this is only the beginning

It is not for nothing that the Stronghold Digital Mining holding company has turned to fossil fuels to power its mining machines. As explained Alex de Vriesa Dutch economist, in an exchange with NBC News: “These miners don’t just need cheap power, but a stable source of power, because their machines have to run 24/7, and fossil fuel sources are the best.” adapted for this. »

And the American company does not intend to stop there: Stronghold Digital Mining has indeed announced its intention to buy two other thermal power plants in Pennsylvania. By next year, it aims to have no less than 57,000 RIGs and all these machines will need a significant source of energy to operate!

For those who are already crying scandal, the holding wanted to be reassuring about the consequences of its decisions on the environment. In filings with the Securities and Exchange Commission (SEC), the bitcoin mining company claimed that there is no risk to nature : “We are employing 21st century cryptocurrency mining techniques to address the impacts of 19th and 20th century coal mining in some of the most environmentally neglected regions in the United States”, she said. To be continued.

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