Bitcoin Mining vs the Environment — Part 2

We need to talk about heat

Prologue:

While this article can be enjoyed as a standalone piece, it is best read in conjunction with this earlier article that deals with another negatively perceived aspect of Bitcoin mining, namely power consumption.

The key points that can be taken from that piece are:

• Bitcoin mining is a huge industry that is growing rapidly, but has three significant environmental concerns which are: power consumption, heat generation and recycling of equipment.
• Whilst it’s true that power consumption is currently a problem, it is argued that it is not as big as it is made out to be and there are even specific examples where Bitcoin mining is providing an immediate environmental benefit.
• The primary argument proposed is that Bitcoin mining in the long term could actually be a low environmental impact activity in terms of power consumption as existing trends continue to play out.

However, even if the problem with power consumption is ultimately resolved, two other significant problems remain — heat generation and equipment recycling.

This article will deal with the issue of heat generation.

Man, its hot in here

Back in the days when Bitcoin mining could be done efficiently on simple home PC CPUs, heat impact wasn’t really significant. Sure, the CPU was working a little harder and probably for longer, but it was nothing the heat sink couldn't handle and the collective impact would have been negligible.

By the time mining had moved on to GPUs, we had a glimpse of the problem to come.

Anyone who has ever played a graphic intensive game on their computer would have noticed the sound of the GPU fans spinning up as they did so. These are fabulous bits of kit for processing the calculations needed to make accurate real time video rendering, but they consume significant power and produce noticeable heat when running at full pelt.

It was soon discovered that they were also very effective at Bitcoin mining due to their architecture and, for a while, this was the de facto standard for providing hash power to the network.

In fact, my very first mining rig, nicknamed “Big Blue” due to the entirely unnecessary act of putting bright blue LEDs on the the entirely necessary fans, consisted of 12 Nvidia Geforce GTX 1080ti’s whirring away at full (and often overclocked) power. Any room the custom made unit was placed into immediately became unbearably hot and it was even warm enough to heat the entire house in winter by virtue of the fact it ran 24/7.

Heat was now an accepted byproduct of the activity and as the inevitable race for hash rate supremacy unfolded, heat production accelerated. By the time the move to ASICs (Application Specific Integrated Circuits — the modern day specialist devices used for Bitcoin mining) was complete, heat was such a big issue that it became a hugely influencing factor both on where mining operations would be based and how those farms would be constructed.

But not from an environmental point of view you understand, purely from an economics point of view.

After all, the environment would be fine, right?

Where does the heat go?

Recently, there have been heated (pun intended) discussions about the effects of air conditioning on the planet.

Something that was once reserved for high end homes and public buildings has now become a standard of living essential. In 2019, according to a report by The Guardian, there were around a billion air conditioning units in the world, but the same report forecasts this to rise to 4.5 billion by 2050.

The environmental concerns are primarily about power consumption (which is enormous and growing) and the use of damaging hydrofluorocarbons (HFCs). Both of these issues can be resolved in the long term (albeit not fast enough for many, including myself), but does that mean we can discount the heat output completely?

Air conditioning works by taking the warm air from a room, passing it over a cold surface comprised of a coolant which removes the heat it contains and returning the cool air to the room. The heat, now held by the coolant in gaseous form, is radiated off outside, returning the coolant to liquid form in as it does so, ready to go round again.

This is a simplification, but the key point is that the heat already exists and we are merely processing and relocating it. Surely, therefore, the heat impact is minor — even negligible? Who cares if it’s outside rather than inside? Does it make any difference to the global environment?

Climatologists have tried to measure this effect many times as referred to in this report by Popular Science. In 2007, Yukitaka Ohashi of the Okayama University of Science in Japan found that air conditioning units could raise temperatures in downtown Tokyo by as much as 2°F — and this was before these units were as prolific as they are now.

A similar study in 2013 study modeling temperatures on the streets of Paris found that the effect was most acute at night (even though air conditioning use was lower) due to the way the heat is held in place by the planetary-boundary layer which is thinner at night.

The net effect is that the air feels warmer and people turn up their air conditioners still further, driving the cycle upwards and using more power as a result.

While we can’t claim that the heat generated by Bitcoin mining is “already there” as in the case of a warm room, it is clear that there must be some impact on at least the local environment, since it is actually observable in a relatively confined place.

Taking that observation and applying it to Bitcoin mining must mean that wherever those farms are located, there must be logically be some form of impact to consider.

However, such impacts (and possible solutions) are also likely to vary by geographical location. Could we really say, for example, that dumping a giant heater in an artic location would have the same impact as dumping it in a desert?

Bitcoin mining in cold areas

Miners have naturally gravitated to cold areas as it makes cooling the equipment so much easier, or perhaps more cynically, cheaper. As a result, mining operations have sprung up in Iceland, Canada, Georgia, Russia and China among others, especially where low cost power is also in abundance.

Even without definitive numbers on the effects of consistently releasing heated air into a cold environment, I would wager that the long terms effects are probably not favorable. However, heat is a product that is important to humans so the logical step is to find ways to recycle it and, in a cold area, there is always demand.

The idea of recycling heat from another (often unrelated) process is not new, even before the world of cryptocurrency mining really got started.

In 2013, for example, Redditch Borough Council (based in the UK) announced that they were using waste heat from the crematorium to maintain the local community swimming pool. It was a project that was considered controversial at the time and driven, importantly, by economic gain rather than environmental concerns.

Meanwhile, in the world of cryptocurrencies, various companies have come and gone looking at various ways of solving the problem, usually with a name that reflects what they’re doing (such as the now defunct Hotmine and Heatmine) but there is no “killer app” or universal solution as yet.

Even so, there is considerable activity around the issue.

Detailed calculations and exploratory work into using heat from mining farms to heat Finnish homes was carried out in a thesis by Tri Nguyen and Anh Hoang in 2018 and there have been similar examinations of the idea in Norway, Iceland and Canada.

A Swedish company, Genesis Mining, announced at the end of 2020 that it was piloting the use of the heat generated from its operations to power a new generation of greenhouses for food production.

And these are just a few of the many projects that are currently in development in what is a very new area. Any cursory google search reveals a whole host of other ideas, concepts and experiments around cooling technologies, the heating of water on an industrial scale, various industrial applications and so on.

But, in my opinion, to truly mitigate the thermal effect of mining, that heat has to be used in a way that it replaces heat that would have been produced anyway by other power sources.

So, for example, if you managed to warm your home entirely with waste heat from a bunch of Bitmain Antiminers and never had to switch on the gas burner, you’re on your way to succeeding. It looks like this is at least theoretically possible to deliver.

But what about places where the climate is warmer?

Bitcoin mining in warm areas

Since the vast majority of mining happens in cold areas and where cheap power is abundant, the previous section is, by default, the most important one.

However, as we have already seen, miners are likely to use the by products from the oil and gas industry to power their rigs, at least in the short term. While we already know the net environmental effect is positive in terms of power consumption and methane production, it does mean farms are being located where this power source exists, not necessarily where it is cold.

Also, while countries like Georgia and Estonia are cold in winter, warm summers mean cooling is still required. In Kuwait (attractive to miners because of heavily discounted electricity prices) the prospect of any natural cooling is next to impossible.

And that means two things:

• air conditioning to take the heat away
• lack of opportunity to re-use the heat generated

In these areas, there are very few realistic opportunities to use the heat productively. For example, there is little or no heating requirement for air or water (except possibly at night in a few locations) and greenhouses receive everything they need naturally. What do you do with it?

The short answer is: not much. The reality is that, for the moment, this area is likely to be the last to be developed into something useful, assuming it ever is.

The only consolation is the fact that this form of mining makes up a small percentage of the overall picture, at least for now.

That fact helps, but is that really enough?

The Bottom Line

Recycling heat, especially in cold locations, is not only possible, but also desirable in many cases. However, it’s not easy and, worse, if done incorrectly, may not even yield any real environmental benefits anyway.

A report by Sarah Broberg Viklund in 2015 for the Linkoping University in Sweden entitled “System studies of the use of industrial excess heat” essentially came to the same conclusion, even without taking into account the effect of Bitcoin mining. It’s a long and detailed read, but it’s clear the author spent some considerable time and effort coming to her conclusions.

So what does that mean for the future of Bitcoin mining?

Sadly, this point is not as clear cut as the argument for long term optimism in terms of power consumption. Yes, there are projects, concepts, experiments, a recognition of the problem and a willingness to look at solving it, but there's nothing I’d agree is a concrete solution at this time.

The optimist within me, however, can’t help but believe this is problem we will ultimately conquer as well as everything else, even if we have to wait until we have passed this “gold rush/anything goes” stage of Bitcoin mining that we find ourselves in.

After all, it’s logical. The mining process produces heat that we would definitely use instead of generating new heat, provided we were able to do so easily and efficiently.

But even I, the ultimate optimist, would add a caveat.

Unlike power consumption, where miners have a vested interest in consuming as little as possible as efficiently as possible to make greater profit, there is no real incentive to do the same with heat.

For this to change, one or more of these things would have to happen:

• new technology is developed that allows efficient heat transfer over greater distances in an affordable way
• it becomes economically advantageous for miners to provide their excess heat to local communities or industry either via selling it or by receiving subsidies from government for doing so
• miners are forced to comply with heat emission standards by governments with threats of closure or penalties for non-compliance

All three are possible but it can’t be known which, if any, will ultimately be the first to prevail. But prevail we must if we are to be environmentally responsible in the future.

But does that mean we’re in the clear if we manage it?

In the best case, medium to long term scenario with heat recycling systems and entirely green power provision, we could venture a “perhaps” — at least from a production point of view.

But we still need a great deal of highly specialized equipment to make it all work.

But since it can’t be used for anything else, what happens to it when it reaches end of life?

This, in fact, is the very question we will be examining next.

Due to my long standing relationship with CyberianMine, I am able to offer a very attractive referral link to anyone who is looking to get into sustainable Bitcoin mining. Using this link, you will have 45 euros credited to your account to start with, a further 25 euro and 2.5% credited back on your first miner purchase and 10 euro and 1% of every miner after that. It’s a cracking scheme, so click here to use the link and register!

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Disclosure: The author of this opinion piece has been heavily involved with bitcoin for several years and holds a substantial cryptocurrency portfolio, including bitcoin. He also has a mining operation running the SHA-256 algorithm based in Siberia and is a published author on the subject of promoting the understanding of cryptocurrency. Jason is an analyst at Quantum Economics. This article first appeared on Voice.com

Disclaimer: This content is for educational purposes only. It does not constitute trading advice. Past performance does not indicate future results. Do not invest more than you can afford to lose. If you found this content interesting, and have an interest in commissioning content of your own, check out Quantum Economics’ Analysis on Demand Service.