Bitcoin acts as an intermediary for energy and value storage
Oil mining byproduct, natural gas, is now used to generate electricity for Bitcoin mining. Bitcoin mining is often an energy intensive process as computational power is required to solve difficult mathematical problems. In the process, a mining farm that finds the correct solution creates a new block is rewarded and thereby validates Bitcoin's proof-of-work protocol.
Energy storage for electricity is often stored at pumped hydroelectric reservoirs. More than 90 percent, or 20 gigawatts of electricity is stored in this manner in the US. Water form the reservoirs is released to turn turbines that generate electricity.
Many oil fields burn away natural gas using flare stacks as a byproduct waste. Flaring is still controversial for environmental pollution as some argues the excessive release of toxic gases while methane, a greenhouse gas, is converted to carbon dioxide, its 'less' harmful form. The processing, transport and storage of natural gases is a modern day challenge especially when infrastructures have to be built solely for this purpose.
In the article on newsBTC, a Canadian oil company, Black Pearl Resources, redirected the wasted natural gas into an electricity generator which in turns powers a bitcoin mining farm.
This relationship benefits the oil mining company to keep their gas output below government-regulated levels:
“It was the best option for us… We’re using it to bring ourselves below the government-regulated amount that we can vent on location and keep producing oil,” Wartman explained, noting that they are able to keep the oil well operating 24 hours per day by directing the natural gas output into the crypto mining rigs.
This initiative also helps to lower cryptocurrency mining costs since mining will be powered by 'recycled' energy. The purpose of Bitcoin extends beyond its store of value for finance but also for energy that could be stored for centuries. Imagine energy getting crystallized in the form of blockchain and cryptocurrency. Is this a viable move for the future?