Bitcoin mining makes solar systems more profitable

The scientific journal Heliyon has published an independent study that examines the economic and environmental aspects of using photovoltaics (PV) to support Bitcoin mining facilities. The aim is to close a gap in the literature and identify solar power as a forward-looking solution to counteract the alleged energy and environmental impacts of Bitcoin mining.

Blocktrainer.de has already reported several times on the combination of Bitcoin mining facilities with renewable energy sources. Mining companies are looking for cost-effective sources of electricity and often find them in sustainable energy power plants, which, due to their intermittent nature, temporarily produce unused surplus that is ultimately utilized by the miners. The additional income for the electricity producer can promote the expansion of renewable energies, make climate protection more profitable and drive electrification in general. Bitcoin mining can also serve as virtual energy storage and virtually eliminate the limitations of renewable energies.

Although the new study aims to demonstrate the advantages of renewable energies for the mining process, it also once again highlights the benefits that mining brings for the economic viability of sustainable energy generation.

In the study entitled "Renewable energies and cryptocurrencies: A dual approach to economic viability and environmental sustainability", the authors Ali Hakimi, Mohammad-Mahdi Pazuki, Mohsen Salimi and Majid Amidpour focus on solar energy. According to the study, PV systems are crucial for climate protection and have advantages over other renewable energies in terms of scalability, adaptability and initial emissions during the manufacturing and installation process.

The study is based on a simulation for which the relevant data is required. For this reason, the study period starts in 2020. At that time, the majority of Bitcoin's energy mix came from fossil energy sources and scientific opinion was mainly influenced by the work of Alex de Vries, which was often based on false assumptions and has already been refuted several times - Blocktrainer.de reported. Unfortunately, some of these false assumptions regarding the environmental impact continue in this study. Refutations of de Vries or new recognized calculation models such as the BEEST model or the already positive development of Bitcoin's energy mix are not mentioned.

For the economic analysis, the authors use the special simulation software PVsyst Version 7.3, which can carry out precise calculations on energy production using a comprehensive database with geographical and meteorological data and information on the PV modules.

To ensure a continuous power supply and avoid the need for expensive battery storage, some of the energy generated is fed into the national grid during peak load times and the same amount is re-imported at night.

Special calculation models determine the number of Bitcoin mined in the plant. The study assumes that these Bitcoin are sold daily at the current exchange rates in order to compare the value with the income that the solar power plant would have generated solely by selling the electricity.

In contrast, the PV and mining system worth around 42 million US dollars would pay for itself within 3.5 years.

From the fourth year onwards, the energy production costs for Bitcoin mining are almost equal to the annual operating costs of the plant (about 0.9 million dollars per year), resulting in energy production costs of about 0.011 USD/kWh.
_{Excerpt from the study}

The simulation software also assessed the environmental impact by comparing electricity generation with carbon emissions from the use of fossil fuels in the UAE's electricity grid. It should come as no surprise that CO₂ emissions are reduced by solar-powered mining and the carbon footprint is therefore more positive.

According to the calculations, the mining farm powered by the solar power plant would save an average of 50,000 tons of CO₂ emissions per year, which is equivalent to 10,700 cars. Over a period of 25 years - the estimated lifespan of the plants - more than 1.2 million tons of emissions would be avoided.

However, the study goes beyond the emissions saved and attempts to take the entire ecological footprint into account. Ultimately, this also includes life cycle emissions (in the manufacture of solar modules and mining hardware) and the problem of electronic waste. The latter arises from the procurement of new mining hardware, which is becoming increasingly inefficient as the hashrate and difficulty of the Bitcoin network increases.

The basis for the analysis includes the work of Alex de Vries on energy consumption and electronic waste from Bitcoin mining, which unfortunately does not make the study any more credible. The study is based on the wrong data and also mentions the long-disproved metric "per transaction", which Alex de Vries also applied to e-waste, among other things. According to this, each Bitcoin transaction would allegedly produce 134 grams of e-waste.

A hardware upgrade of 4,000 S17 ASIC miners would ultimately lead to 38,000 tons of e-waste, which would have a huge impact on the environment, according to the study. However, according to entrepreneur, environmental and Bitcoin activist Daniel Batten, the e-waste aspect of Bitcoin is a myth. While many graphics cards contain environmentally harmful substances and make recycling difficult, Bitcoin miners are free of harmful substances such as heavy metals and are 100 percent recyclable.

However, the study also points out that the reuse of miners - for example by home miners, for small projects in poorly electrified regions or in various heating processes - is a better solution than direct scrapping.

The new study makes the obvious clear by contrasting the benefits of renewable energy with the environmentally harmful effects of Bitcoin mining with fossil energy sources. By abandoning fossil sources and using green electricity for mining, emissions are logically reduced.

Overall, the study is heavily influenced by Alex de Vries, who sometimes used inaccurate data and claims to portray Bitcoin's environmental impact as worse than it actually is. There is no doubt that mining has a detrimental impact on the environment, but it is a shame that the study fails to mention that Bitcoin's energy mix has improved significantly in recent years and that the mining industry has become one of the most sustainable global industries. Most current scientific work on the subject emphasizes the positive aspects that Bitcoin has for the environment and society. This is missing from this study.

Although this reinforces the outdated narrative about Bitcoin's environmental impact, the authors of the study do not call for a ban on the mining industry. Instead, they want to convince policy makers to only allow large-scale Bitcoin mining with renewable energy sources - especially solar power - in order to reduce emissions.

The study ultimately also showed that the additional income from mining can lead to increased profitability and a significantly shorter payback period for solar parks. As a result, the study has once again highlighted the synergies between renewable energies and Bitcoin mining, which lead to a win-win situation for the environment and the economy. The two sectors complement each other and together create economic and ecological added value that would not exist in this form without the cooperation.