Tesla Megapack will power the open-source, solar-powered Bitcoin mining facility with Blockstream and Jack Dorsey's Block.
Block (previously Square) and Blockstream, a Bitcoin infrastructure business, are partnering with Tesla (TSLA) to build a Bitcoin mining operation that will demonstrate that BTC can be used to fund zero-emission power infrastructure.
The facility will be powered by Tesla's 3.8-megawatt solar PV array and its 12-megawatt-hour Megapack, and work on it has begun.
The facility's 30 petahashes per second mining hardware will be powered entirely by solar energy, thanks to a mix of Tesla photovoltaics and Megapack battery storage. The Bitcoin mining facility will be finished later this year, with Blockstream supplying the mining technology and expertise to design and operate the operation.
According to a press statement shared with Yahoo Finance, the $12 million project would generate 3.8 megawatts of renewable energy and display a publicly accessible performance dashboard once finished.
Climate activists, ESG investors, and Bitcoin miners continue to discuss the energy intensity of Bitcoin mining in the political realm. Part of the issue is that most of the data on mining energy use is still too fresh to offer historical context and is frequently self-reported.
The Cambridge Bitcoin Electricity Consumption Index found that Bitcoin's overall energy consumption (143 terawatt hours per year) is more than that of Ukraine, but it also admitted that comparing Bitcoin's energy consumption to a nation without extra context can be difficult.
Blockstream co-founder and CEO Adam Back, a British cryptographer and a cypherpunk crew member, told CNBC on the sidelines of the Bitcoin 2022 conference in Miami that the mining operation is intended to be a proof of concept for 100% renewable energy bitcoin mining at scale.
In a news statement, Adam Back, CEO and co-founder of Blockstream, said, "We are very happy to begin building this facility utilizing Tesla Solar and Megapack." "This is a step toward validating our premise that Bitcoin mining can support zero-emission power infrastructure while also fostering future economic growth."
The facility is expected to be finished "later this year." When it's up and running, a public dashboard will provide "real-time measures of the project's success, such as electricity generation and Bitcoin mined." The dashboard will be accessible "24 hours a day, seven days a week, from any browser, presenting the industry with a real-world, real-time case study of a zero-emission energy Bitcoin mine," according to the plan.
In an interview with CNBC, Back noted, "People like to dispute the numerous issues that have to do with Bitcoin mining." "Let's just prove it," we reasoned. Have an open dashboard so that anybody can play along, and perhaps it will alert more gamers to join in. "
The dashboard will be open to the public and will provide real-time information about the project's success, such as electricity generation and total bitcoin mined. According to the business, a future version of the dashboard would incorporate solar and storage performance data points.
Blockstream and Block, formerly known as Square, announced in June that they would work together to establish an open-source, solar-powered bitcoin mining facility in the United States.
A bitcoin is produced when powerful computers compete against one another to solve complicated mathematical riddles, a time-consuming process that presently relies heavily on fossil fuels.
In early 2021, Tesla spent $1.5 billion on Bitcoin. Shortly after, the company began accepting bitcoin as payment for new automobiles.
On the other hand, Tesla, on the other hand, took a step back with cryptocurrency a few days later by deleting the Bitcoin payment option. The businesses expressed worry about the Bitcoin network's energy requirements:
This was a worry echoed by many Tesla community members when Tesla originally revealed its Bitcoin investment, and many were outraged that the corporation hadn't considered it in the first place.
Tesla stated at the time that they were not selling their Bitcoin holdings and that they intended to begin accepting Bitcoin payments once the network had a larger proportion of renewable energy. Elon Musk, Tesla's CEO, stated last summer that he hoped the company would begin accepting Bitcoin payments if the energy mix of Bitcoin mining improved. That has yet to materialize, but Tesla is already actively involved in using sustainable energy to fuel Bitcoin mining.
The project is already under development, according to the firms. Once completed, they want to share performance data on a monthly basis to demonstrate the economics of powering crypto mining with renewable energy. In the United States, West Texas is a renewable energy powerhouse. However, much of the wind and solar energy in the state is located in isolated areas. There is no motive to invest in renewable infrastructure to harness this energy if there is no financial incentive.
Bitcoin miners are the people who create bitcoins. When these energy consumers co-locate with renewables, it generates a financial incentive for buildout while also improving the underlying economics of renewable power production, which has been volatile.
According to Castle Island Venture's Nic Carter, miners offer demand for these semi-stranded assets, making renewables in Texas commercially viable.
The restriction is that West Texas has around 34 gigatonnes of electricity, five gigatonnes of demand, and only 12 gigatonnes of transmission. Consider bitcoin miners to be short-term purchasers who keep energy assets operating until the grid can absorb them completely. Back stated that the off-grid mine, which is anticipated to be finished later this year, exemplifies another essential aspect of the bitcoin network: miners are location agnostic and can "perform it from anyplace without local infrastructure." Back stated that if the project is lucrative in its pilot stage, the firms would add wind power to the mix and grow the entire project.
"You're calculating the ideal economic mix of solar and storage," Back explained. "There are 3.8 megawatts of solar and one megawatt of mining, so you can see you need to overprovision since peak solar input changes over the day and, of course, it's not there at night."
Adding wind to the mix, on the other hand, would lower total expenses and help balance out the downtime caused by solar.
Sen. Elizabeth Warren (D-MA) is one of the most outspoken critics of the Bitcoin mining sector in the United States. Warren and other senators addressed a letter to several prominent Bitcoin-mining businesses in late January, voicing concerns about their energy use and highlighting how Bitcoin's overall energy consumption increased between 2019 and 2021.
According to Ark Invest research, the mining sector generates 76 percent of its electricity from renewable sources, making it significantly more renewable than the overall US energy system and beneficial for recovering otherwise squandered natural gas.
Block's global ESG lead and project lead for Block's Bitcoin Clean Energy Initiative, said Neil Jorgensen. "By partnering on this full-stack, 100 percent solar-powered bitcoin mining initiative with Blockstream, we want to further accelerate bitcoin's synergy with renewables.".
