DLD 2020 Bitcoin Energy Panel

There was some informed comment on how bitcoin mining helps with solving the climate emergency, as opposed to being a part of the problem. The conference for this panel was the “DLD Munich”, which means “Digital Life Design”. It was founded in 2005, is backed by a large German media company, and attracts a lot of attention, regularly getting covered by hundreds of journalists.

I learned that flare gas throws away about as much energy as Africa uses. And Crusoe Energy Systems has started a business mining bitcoins with the flare gas.

They take the mining right to the source of energy, using the fact that without a pipeline, the oil company has no way of using excess gas, just burning it. Burning it in a controlled way reduces methane emissions, a potent greenhouse gas, as well as reducing waste of energy and securing the Bitcoin network. And they can install one of their modular systems in just a couple of days.

This use case is having oil drilling infrastructure in place, but no pipeline for the gas. Another use case would be large desert renewable projects, where you also might build the renewable energy power source before having the pipeline infrastructure for hydrogen transport built out.

That in turn might help massively getting these kinds of projects running.

I was slightly puzzled when moderator Alexander Liegl closed the panel with the name “Greta Thunberg” as time was running out and remarked that people could ask him later about that.

I did ask.

He replied recycling some previous tweets about “irrational government subsidies for renewable energy”. Here they are:

Number one. Irrational Government policies subsidized construction of huge renewable energy projects (esp. in Europe) now stranded due to inefficient transmission infrastructure. Owners *pay* others to take their electricity. Bitcoin Mining unlocks profitability for stranded renewables.

Number two. Government-subsidized over-supply and mis-architecture of large-scale renewable energy infrastructure will continue. This offers an unprecedented opportunity for locally consuming high-performance computing infrastructure to arbitrage energy markets on a global scale.

At the time those “irrational subsidies” were enacted in 2000, Greta Thunberg was not yet born. And it may be open to debate if these were “irrational”. I for one think it is a great success of those policies that solar energy costs are down below 2 cents a kWh in good locations.

On the other hand, I do agree with his idea that Bitcoin mining will help balance grids, especially in the coming couple of decades of the transition to a renewable based energy system.

Bonus link to his company Layer 1.

Published by kflenz

Professor at Aoyama Gakuin University, Tokyo. Author of Lenz Blog (since 2003, lenzblog.com).

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