Hydro Power Archives

Green energy powers most of Bitcoin mining and the world might as well face it. And the rest of the cryptocurrencies that use Proof-Of-Work might be right behind, because they follow the same incentives. In their quest for cheaper energy sources, they all reach the same conclusion. Humanity is wasting renewable energy all over the world. And wasted energy is the cheapest of them all.

In today’s story, a hydropower plant that had to pause operations for nine months found cryptocurrency mining and got the dream client they needed. Reuters gives us the prelude to the story:

“The plant was forced to reinvent itself after 30 years because the government stopped buying electricity during the pandemic due to surplus power supply in the Central American country, where the state has a monopoly on energy distribution.”

How much green energy does a country has to have to just stop buying from a clean hydro plant? Well, according to hydropower.org:

“At the end of 2016, Costa Rica reached a total installed hydropower capacity of 2.12 GW. The country dominated the headlines for the second consecutive year, achieving 100 per cent renewable electricity production for a total of 271 days.”

How Did Crypto Mining Enter The Hydro Plant’s Picture?

Every talking head and their grandmas spread ESG FUD through traditional media. And that spills into social media, where everybody is oh-so-sure that crypto mining is boiling the oceans. Because of that, Eduardo Kooper, the owner of the plant, doubted going the crypto mining route. However, they just had to pivot. They tried other ventures, like making frozen food, and none of them work. There was no other choice.

“I was very skeptical at first, but we saw that this business consumes a lot of energy and we have a surplus.”

The hydroelectric company, with its three plants valued at $13.5 million and a three Megawatt capacity, invested $500,000 to venture into hosting digital mining computers.”

Why would miners move their operation to a hydro plant, though? Wouldn’t it be more comfortable doing it at home? They are heavily incentivized to look for the cheapest energy possible, that’s why. And green energy is renewable. Coal is not. The Reuters report quotes one of the hydropower plant’s satisfied customers:

“Installing it in this place is much more profitable than at home,” at almost half the cost, he calculated, after connecting his computer to the network at the river-powered plant.”

Business is business.

BTC price chart for 01/12/2022 on OkCoin | Source: BTC/USD on TradingView.com
Green Energy And Crypto Mining, A Match Made In Heaven

We at NewsBTC have been telling you this. Bitcoin mining incentivizes the creation of green energy infrastructure. And it can finance green energy plants already in place. Mining provides both a buyer of first resort and a buyer of last resort. Three months ago, we wrote:

“A whitepaper by the Bitcoin Clean Energy Initiative from earlier this year had explained how bitcoin mining, when using renewable energy, “is especially suited to accelerate the energy transition” towards a cleaner electricity grid.”

And two months ago, in an article on how Bitcoin mining is helping the Navajo Nation in more ways than one, we told you:

“As the world is trying to phase out coal-powered energy, the Navajo innovate to keep up with the times. According to Walter Hasse, Navajo Tribal Utility Authority president, “I had excess electricity that I still had to pay for and deal with. Now, I want to build renewable energy to replace my lost coal resources that are throughout the nation. I need someone to consume that renewable energy resource.”

And with Bitcoin mining, they have that buyer. And now, the other PoW cryptocurrencies can follow Bitcoin’s example. In Costa Rica, the other side of the world, a power station manager reaches the same conclusion as the Navajo Tribal Utility Authority president. Quoting Reuters again:

“Kooper said international cryptocurrency miners are looking for clean, cheap energy and a stable internet connection, which Costa Rica has plenty of. However, he said Costa Rica’s government should be more aggressive about trying to attract more crypto mining business, although he gave no specifics.”

The Green Energy Future We Deserve

Proof-Of-Work mining is a net positive for the planet. It will lead us to the green energy future that humanity’s dreaming of. It’s the only industry that can do so. And the revolution is already well underway.

Featured Image: Screenshot from Reuters’ video report | Charts by TradingView

Did China make the mistake of a lifetime by banning Bitcoin mining or do they have a secret plan? That’s the question the whole Bitcoin ecosystem is struggling to answer. And today, we got another piece of the puzzle. In the article titled “It’s Over, It’s All Over” – The Death Of China’s Bitcoin Mining Industry,” a pseudonymous manager by the name of Ye Lang tells his story. And in his tale, a bigger story is reflected.

Related Reading | Bitcoin Hash Rate Goes On Death Spiral Post China’s Crackdown On Miners

On May 21st, in a “meeting of the State Council’s Financial Stability and Development Committee, a top-level economic and financial policymaking body chaired by Vice Premier Liu He,” China decided to ban Bitcoin mining. Less than a month later, on June 19th, the Sichuan government ordered “the closure of Ye’s facility, along with 25 other cryptocurrency mining projects in the province.”

That story started like this:

Ye decided to jump on the Bitcoin mining bandwagon in 2018 when he closed down the majority of his internet café business, mortgaged his apartment in Anqing, Anhui province, borrowed money from relatives and left his wife and daughters to move to Sichuan

What can we learn from Ye’s first-hand experience?

1.- It Only Takes 80 Employees To Manage An 80,000 Bitcoin Miners Operation

At the peak of the facility’s Bitcoin mining operations, Ye was in charge of 80 employees and a total of 80,000 mining machines, with the entire project estimated to be earning more than 90 million yuan ($14 million) during the peak six months when Sichuan’s rivers are glutted and electricity is especially cheap

The numbers are staggering. Evidently, supersizing mining operations offers a huge advantage. Especially in regions with cheap electricity.

2.- Clean An Renewable Energy Didn’t Save Sichuan

The fact that the electricity for crypto mining in Sichuan came from clean hydropower meant that many thought the province would be a safe haven for Bitcoin miners. As pressure on local governments to cut carbon emissions mounts, projects were successfully shuttered in some other provincial-level regions — such as Xinjiang and Inner Mongolia — where the mining was chiefly fueled by coal.

The only thing we can know for sure about the Chinese government’s plan is this: the environment is not on their radar. They’re closing these mining operations for other reasons altogether.

3.- Bitcoin’s Energy Use Is Not The Issue

The fact that the Sichuan crackdown was about to hit, confirms what everyone has known: the “justification” for cracking down bitcoin miners, the cold shoulder on bitcoin by social luminaries (such as Elon Musk) and the use of the ESG bullshit excuse that crypto is “dirty” have always been merely a socially-acceptable smoke screen for a regulatory crackdown on cryptos when they become too big.

Enough said. ZeroHedge nailed it on the head.

It’s also worth noting that Nic Carter also nailed it on the head regarding China’s energy mix when it came to Bitcoin mining.

4.- Individuals Can Still Mine Bitcoin In China

Despite the government’s hardline approach, Ye is determined to carry on: “This industry is extremely volatile. High emotions and stress are involved, but that’s also its appeal. Companies are banned from mining Bitcoin, but individuals aren’t,” Ye said, adding that he plans to turn around his operation by purchasing old equipment and downsizing.

The Chinese government was only worried about industrial-sized private mining operations. The question is why. What are they planning? Nobody seems to have figured that out.

5.- One Owner Mined Between 70 and 80 Bitcoins Per Day

Another character enters the scene, the owner of the mine. We’ll call him Liu Weimin, also a pseudonym.

Liu owned more than 10 Bitcoin mining farms, which industry insiders estimated accounted for one-eighth of the total electricity consumed by all Bitcoin mines in the province.

During peak seasons, Liu said his farms could mine 70 to 80 Bitcoins every day. About 900 Bitcoins are issued each day globally, according to an industry information platform.

Almost 10% of the total daily issuance seems like too much for a single individual. The Bitcoin world scored a huge win with the Chinese ban on Bitcoin mining.

BTC price chart on Bitstamp | Source: BTC/USD on TradingView.com
6.- A Industrial-Sized Mine Can Break Even In A Year

“Mining farms are somewhat like conventional crop farms. No matter how the Bitcoin market changes, the mining process remains. Opening such facilities is a relatively stable investment, and I can generally break even in a year,” Liu told Caixin.

There are few businesses in the world that can give you that ROI. At least among the legal ones. Food for thought for the young entrepreneurs out there.

Related Reading | How China Bitcoin FUD Is Lowering The Cost To Produce BTC

7.- Bitcoin Mining Used To Be A Respected Business In China

Thanks to the Sichuan government’s mining-friendly policies back then, Liu’s business continued to flourish for the past three years. He quickly made a name for himself, and was a frequent guest at government events and meetings, where he was recognized as one of many model energy consumers who had helped lift locals out of poverty.

From a respected businessman to a social pariah. It would be easy to feel sorry for Liu if he wasn’t on his way to restore his business.

Following the government’s May 21 crackdown announcement, he arranged teams of employees to scout for new venues in North America and Kazakhstan. In mid-June, his company bought an oilfield in Canada that could potentially provide fuel for his Bitcoin mining business.

So, why did China banned Bitcoin mining? We have no idea. We know, however, that their hold over the industry was already waning and that entrepreneurs are selling small hydropower stations. And we have both Ye and Liu’s stories. Is the picture clearer? Are we closer to the real deal?

Featured Image by Лечение Наркомании from Pixabay – Charts by TradingView