- “Bitcoin mining allows for a faster payback on renewable energy projects such as solar, wind or hydro projects.”
- Miners are already raising capital to finance and build their own power plants.
- “Bitcoin mining facilities can participate in demand response programs to improve the health of the grid around them.”
Much has been written about Bitcoin (BTC) and its voracious appetite for energy. However, even if the cryptocurrency consumes nearly as much electricity each year as the Netherlands, there are a number of people within the Bitcoin industry who are arguing that it could end up being a net positive for the energy sector.
Most recently, analyst and Adamant Capital founder Tuur Demeester claimed (in a private Twitter account) that “Bitcoin mining can increase countries’ total electricity production capacity, such that in times of peak domestic demand the market has more spare electricity to divert to households who need it.” While this claim wasn’t backed up by much in the way of hard data, Demeester predicted that as Bitcoin mining continues to grow, more power plants will be constructed, with excess energy from these plants being used for domestic consumption (in addition to mining).
According to researchers and industry figures speaking with Cryptonews.com, such claims have some merit to them, insofar as Bitcoin mining has generally resulted in an increase in overall energy capacity and production. However, commenters are split on the question of whether Bitcoin will contribute to national power grids, with some researchers suggesting that plants built for mining are used exclusively for mining (and nothing else).
Is Bitcoin mining increasing national energy production?
According to people operating within the cryptocurrency mining industry, there do appear to be some isolated examples of mining plants being connected to domestic energy grids. This is what Cryptonews.com is told by Zach Bradford, the CEO & President of CleanSpark, a Nevada-based energy technology and clean Bitcoin mining company.
“For example, for a new mining facility we are getting off the ground near Atlanta, Georgia, we partnered with the utility company to invest in new transmission lines — benefitting not just our own facility but everyone who lives along those improved lines,” he said.
Per the CEO, they will also be participating in a local program sponsored by the utility that will allow them to purchase renewable energy credits to offset any fossil fuels in the local energy mix.
Bradford adds that the funds flowing into the program will be used to increase investment in solar energy production in the local area, thereby benefiting other consumers of energy. He also notes that other firms within the mining industry have refurbished coal-based fossil fuel plants and converted them to natural gas plants, something which isn’t particularly environmentally friendly, but does at least increase overall capacity.
This is an observation made by other individuals, both within and without the mining industry.
“Bitcoin mining allows for a faster payback on renewable energy projects such as solar, wind or hydro projects, which means more of them can be built faster in regions where it would not be economically attractive otherwise,” explained Igor Runets, the founder and CEO of BitRiver, a provider of colocation services for green cryptocurrency mining.
That said, others note that most of this new capacity is used pretty much entirely by the cryptocurrency mining industry itself, with little (or no) excess energy being distributed elsewhere.
“I am aware of examples of miners who have raised capital to finance and build their own power plant. However typically their output is wholly consumed by mining machines, and not redistributed to the grid,” said Bitcoin researcher and investor Marc Bevand.
Likewise, Chia Network Chief Operating Officer and President Gene Hoffman says that new energy capacity often tends to be isolated, particularly in the United States.
“It is certain that Bitcoin mining in the US has led to the building of new power plants and the re-opening of coal-fired power plants. However, this new generation capacity is generally very rural and thus adds to the trapped electrical capacity in the various regions like upstate NY and the Columbia River Valley,” he told Cryptonews.com.
Hoffman adds that, in both of the above places, the Bitcoin mining facilities are rivalrous with other consumers, such as Amazon’s data center in Oregon.
Will mining be used to feed power grids?
Assuming that most new Bitcoin-built power plants are being used only for mining, is it possible at least that the future will bring a scenario where plants originally built for Bitcoin will also send energy elsewhere?
“It’s not just feasible, it’s happening now,” said Zach Bradford. “Bitcoin mining facilities can participate in demand response programs to improve the health of the grid around them.”
According to Bradford, participants in such programs are able to shut down when called upon, this then allows the utility to send the excess energy capacity that was created for the Bitcoin mining operations to areas or facilities which need extra energy. “This usually occurs in times of a natural disaster or times of extreme cold and heat,” he said.
Christopher Bendiksen, the Bitcoin Research Lead at CoinShares, also reports that this kind of thing is already happening.
“There are concrete examples of miners already working as demand response units in Texas’ ERCOT system. They contract with the local grid operators to take off electricity when demand is low, ensuring profitability for the generators, but shutting off operations when demand is high, ensuring availability of electricity to homes, businesses, and industry when it is needed the most,” he told Cryptonews.com.
Bendiksen predicts that the number of miners operating in this fashion “will explode over the course of this decade,” enabling much larger shares of intermittent renewables like solar and wind power in our generation mix.
Not everyone is quite as optimistic though. For Bitcoin skeptic Alex de Vries (also known as the Digiconomist), it’s unlikely that Bitcoin mining — and plants used for mining — will contribute in any substantial way to a nation’s domestic energy networks.
“Miners can only consume energy — they cannot store any. In several cases, they’re already taking energy that others need or could use,” he told Cryptonews.com.
This kind of thing happened, for example, in Abkhazia, resulting in rolling blackouts. De Vries notes that Bitcoin mining is also draining Navajo Station while around 14,000 Navajo homes still don’t have power at all.
“Locals seem extremely angered,” he says, referring to comments left by residents in response to a Facebook post by Navajo Nation President Jonathan Nez.
Net positive in the future?
These criticisms notwithstanding, the mining industry is optimistic that mining will become a net positive for the energy industry in the not-too-distant future.
“It’s a huge positive, both for producers, consumers, and our renewal generation goals. With miners acting as demand response units, if mining gets large enough, we can vastly increase the proportion of intermittent renewables in our generation mix,” said Christopher Bendiksen.
Marc Bevand also says that mining will be a net positive, pointing out that the mining industry is unique in the sense that 95% of operational expenditures of a typical mine are spent on electricity, and that there’s no other industry with a share so high.
“Consequently, miners who have their own power plants put a lot of effort into technological advances to reduce cost, so the improvements they develop will inevitably trickle down and benefit other industries. I expect to see some of these advances in the near to medium term, especially with solar power as it is now the cheapest electricity in history, according to the IEA’s World Energy Outlook 2020 report,” he said.
As a researcher into just how quickly Bitcoin’s energy demands have exploded in recent years, Alex de Vries isn’t quite as positive as those with a financial interest in Bitcoin and/or mining.
Asked whether mining will be a net positive in the future, he says, “It probably depends on who you ask. Oil and gas companies seem to see plenty of opportunities but grid operators aren’t as enthusiastic (given complications caused for grid stability).”
Bitcoin Bullish Prediction Is Released By PlanB
There are all kinds of bullish predictions about the price of Bitcoin these days.
At the moment of writing this article, BTC is trading in the red and the king coin is priced just a little above $60k.
One of the bullish predictions has been revealed by analyst PlanB.
Bitcoin to go parabolic
He is expecting Bitcoin (BTC) to go on a major parabolic run over the next few months.
Just to refresh your memory, PlanB is the creator of the Bitcoin stock-to-flow (S2F) model – this attempts to predict the price of the king coin by measuring the amount of new supply that enters the market each year. This is compared to the amount of supply already in existence.
During a new interview, he addressed his S2F floor model as a reliable indicator which allowed him to nail BTC’s monthly closing prices in August and September.
“The model that got the most attention the last couple of months was the floor model because I predicted on June 20th – that was the same time, by the way, that the Guggenheim chief officer predicted Bitcoin to go below $20,000 – at about that same day, I made the prediction: ‘No, no, no it’s going to $47,000.’”
He continued and said the following:
“And Bitcoin was below $34,000 at that time. I said, ‘Well, in August, it will close above $47,000. In September, it goes down a little but it will close above $43,000, and in October it will close above $63,000.’”
He also said that if BTC is to continue following the floor price predictions of his S2F model, then it could surge over 44% from its current price of around $60,000 in November. The king coin could stage another major rally in December.
“If that continues, and frankly I would be very surprised if it doesn’t, that would be a black swan event that we haven’t seen in the last ten years.”
He also said:
“But if that continues, we’ll go to $98,000 in November already and $135,000 Bitcoin in December, so that will be a really nice Christmas this year if that comes true.”
200 Bitcoin ATMs are installed in Walmart stores, according to a report
It is now possible for customers of Walmart stores to withdraw Bitcoins at ATMs installed in their US stores.
The American retail multinational will allow its customers to buy bitcoin using ATMs installed in some of its stores in the United States. The initiative was made possible after a collaboration between retail giant Coinstar and Coinme.
Walmart will actually install Bitcoin ATMs
Last month, Walmart’s name became involved in a story, according to which the company had partnered with Litecoin (LTC) to allow its customers to make payments with the cryptocurrency. Although the rumors caused great excitement throughout the market, as soon as the facts were revealed he corrected them.
Now, however, a more credible Bloomberg report says the company has joined forces with Coinstar – known for its machines that can exchange physical currency for digital money.
The result of this new partnership was the installation of 200 Bitcoin ATMs in Walmart stores. It is now possible for customers to buy and withdraw Bitcoins at ATMs installed in some US stores.
Sam Doctor – director of strategy at cryptocurrency broker BitOoda – said installing bitcoin ATMs in supermarkets is a growing trend in the United States. However, he noted that Walmart is different from its rivals in that its customer niche can reach a more sizable percentage of society:
“Walmart expands access to Bitcoin to more people, as long as it continues to provide legitimacy among the most skeptical”
The Coinstar deal was previously reported by Coindesk, which tested the service. Customers who buy Bitcoin will need to insert paper bills into the machine to receive a voucher.
They must also set up a Coinme account and undergo a background check before the voucher can be redeemed. The machines charge a 4% fee for the Bitcoin option and a 7% cash exchange rate.
“It’s an expensive way to buy Bitcoin, but it lowers the barriers to entry for first-time cryptocurrency buyers,” concluded Sam Doctor.
Number of Bitcoin ATMs Grows Worldwide
This is not just a trend in the US. The number of Bitcoin ATMs is growing worldwide.
According to Coin ATM Radar data, they had only 7,756 in May 2020, and we’ve jumped to 29,852 now in October 2021.
What likely influenced the increase in demand for Bitcoin ATMs (ATMs) between 2020 and 2021 was the growing popularity of digital payments.
A report by Global Trade Magazine suggests that digital payments increased in popularity during the COVID-19 pandemic, with retailers reporting a 69% increase in usage since January, and this likely weighed on the increased demand for bitcoin worldwide.
A month ago, for example, Bitcoin became the official currency of El Salvador and the government launched its own BTC wallet, but, especially because of identity theft, adoption is not going as well as you think.
When there was a distribution of US$ 30 in bitcoin for each citizen in the country, criminals went after other people’s bonuses, similar to what happened in Brazil with the coronavoucher.
Other problems were also reported by two Brazilians who were in the country.
“For example, one of the things that happened is that they announced that the 200 ATMs were going to be [fruto de] a public-private partnership, but in the end, I don’t know if there was any problem in the bidding or any commercial problem in this project, [mas] it ended up being done with public resources”, they told Cointimes.
Bitcoin Forecast and Analysis October 25 — 29, 2021
Bitcoin BTC/USD ends the trading week at 63433, continues to move within the growth and bullish channel. However, while above the local maximum, the quotes are in no hurry to go further up. Moving averages indicate a bullish trend. Prices went up from the area between the signal lines, which indicates pressure from the buyers of the asset and the potential continued growth of the asset’s quotes. At the moment, we should expect an attempt to develop a correction and a test of the support area near the level of 53665. Where can we again expect a rebound and a continuation of the rise in the Bitcoin rate with a potential target above the level of 76505.
Bitcoin Forecast and Analysis October 25 — 29, 2021
An additional signal in favor of the growth of BTC/USD quotes in the current trading week October 25 — 29, 2021 will be a rebound from the lower border of the bullish channel. The second signal will be a rebound from the support line on the relative strength index (RSI). Now the values of the RSI indicator are testing resistance, so it is too early to expect the cryptocurrency to grow directly from the current levels. Cancellation of the Bitcoin growth option will be a fall and a breakdown of the 47055 area. This will indicate a breakdown of the support area and a continued fall in BTC/USD quotes with a potential target below the level of 36605. Confirmation of the development of the bullish movement will be the breakdown of the resistance area and closing of quotes above the level of 67055.
Bitcoin Forecast and Analysis October 25 — 29, 2021 suggests an attempt to support area near the level of 53665. Then, the cryptocurrency will continue to rise to the area above the level of 76505. An additional signal in favor of the growth of the Bitcoin rate in the current trading week will be a test of the trend line on the relative strength index (RSI). Cancellation of the option to raise Bitcoin cryptocurrency quotes will be a fall and a breakdown of the 47055 area. In this case, we should expect a continued decline with a target at 36605.