Mining Bitcoin, excuse me what?

For months I have been hearing people talk about Crypto Mining and I couldnot for the life of me understand what exactly that means. Last weekend I drove to Eagle Pass, TX to assess the border crossing situation (which we will discuss soon) but first this whole Crypto Mining situation has captured my attention. I got a call saying I needed to come to Ulysses, KS and check out this new crypto mining operation that recently hosted an open house. I missed that event but because I showed up, I did get a visual of what exactly is taking place.  

The first thing you notice is that a little substation was built directly in front of the location and power, in this case, is supplied by Pioneer Coop. I was told that it was supposed to be powered by methane from neighboring natural gas production but instead electric from the local co-op is supplying their power. 

Before I go on, I might bring to your attention that in 2021 China issued a nationwide ban on most crypto mining for a number of reasons but at the top of their list was the extreme amount of electricity that was needed and how it would prevent them from meeting their neutral carbon goals. I might remind you that China has just completed it’s 9 th coal fired power plant with 3 more under construction and yet the crypto mining is considered an ecological concern.  

For the record, I have zero concern about coal as a source of electricity. I truly believe the demonization of that industry only plays right into the fact that the government is trying to control our lives. In fact, I have recently learned that 82% of the world’s electricity is derived from coal and 1.79% from solar and wind. Natural gas and coal are the two reliable sources of electricity that should be embraced instead of rejected. 

So back to the crypto mining operation at Big Bow, KS. This location, with five small buildings full of computers running 24/7, is paying $600,000 per month in electric bills. I found that hard to believe but then I did a deeper dive and learned that one, just one, digital transaction required 1739 kwh of electricity. To put that into context, each transaction is equal to the household use of the typical American family for 2 months. That is just ONE transaction and these computers do millions by the minute.  

I have found some other publications talking about the future of crypto mining and here is a summary of what they had to say: 

The process requires immense computing power, with energy consumption equivalent to the demands of countries such as Finland. It also results in massive carbon emissions—an estimated 90.76 million tons annually, comparable to the carbon footprint of Greece. 

In recent years, operations have moved to the U.S. as previous hubs such as China have banned Bitcoin mining. They’ve become concentrated in Texas, with its deregulated energy grid, as well as in New York. Respectively, the two states account for 14% and 19.9% of Bitcoin’s computing power within the United States. 

As I was driving through Texas, just north of Floydada, I drove past another crypto mining sight under construction. It looked just like they were building a a CAFO. You have to wonder if crypto mining is already pulling 2% of the nation’s electricity, where is this headed? 

Since seeing this firsthand, I have spoken with a number of people who are investing in the bitcoin development world. Each one of them has told me that they are extremely energy intense but have not generated an ounce of concern about consuming too much of our electricity. Honestly, that is not how I see this shaking out.

Furthermore, it appears that all of this leads us down the path of eliminating our national currency and forcing us into using global digital currency, which I certainly do not agree with. So where will the buck stop on bitcoin mining? The verdict is still out.