Green Mining & China's Bitcoin Decentralization
Many personalities in the Bitcoin ecosystem have long demanded mining decentralization. Chinese miners concentrate 60% of the processing power.
Most of the Bitcoin hash rate belongs to mining pools in China.
A better distribution would do away with the idea that Bitcoin mining is centralized.
Marathon Digital Holdings' new data center will consume approximately 300 megawatts.
The company's operations will become 70% carbon neutral.
Green mining is gaining traction.
The American Bitcoin mining, Marathon Digital Holdings, will build a new farm in Texas that will house approximately 73,000 specialized ASIC equipment. Construction would begin in October 2021 and start operations in March 2022.
When the farm goes into operation, Marathon will contribute to the Bitcoin network an estimated computing power of 10.37 EH/s. According to company figures, the installation will consume about 300 megawatts/hour, representing 8% of the energy consumed by Catalonia, in Spain, for example. The energy cost would be $0.0453 per kilowatt-hour.
In total, Marathon will manage more than 100,000 Bitcoin miners whose operations will become carbon neutral by up to 70%, as reported by the corporation through a press release. The project is an alliance with the company Compute North that will build the data center to finance 67 million dollars provided by Marathon.
"This agreement puts us on a clear path to become one of the largest, most efficient, and environmentally conscious Bitcoin miners in North America," explained Fred Thiel, CEO of Marathon, who stressed that the loan would not affect the company equity.
Marathon has not yet revealed in which Texas city it will build the data center. Although the company stated that its goal is to achieve zero pollutant emissions with its operations, it is unknown if there is a roadmap to adopt measures to achieve the goal.
Bitcoin mining in North America
Marathon's announcement exemplifies how Bitcoin mining is expanding beyond China, home to most of the network's processing power. The US and Canada are emerging as potential competitors in the fight to gain hash rate and participation within the digital mining industry.
Companies such as Argo Blockchain, Riot Blockchain, Blockcap, or Hut8Mining are joining efforts so that Bitcoin mining reaches a redistribution on a global scale. Even the Canadian ASIC miners for altcoins, ePIC Blockchain, revealed that it obtained financing to start manufacturing equipment in North America and not necessarily import it from China.
Marathon recently captured media attention due to mining a Bitcoin block with a regulatory label from the Office for Foreign Assets Control (OFAC), a United States Department of the Treasury unit. With this action, the company assumed that it would not process transactions from sanctioned bitcoin addresses.
Should China succeed in curbing Bitcoin mining on its territory, this would benefit the network's decentralization. Many personalities in the Bitcoin environment, who have weighed in recent days the possible impact of the Chinese government's measures against the use of bitcoin and the control they seek to exercise against digital miners, have long demanded this decentralization.
Among those personalities, many believe that China will not end up effectively banning Bitcoin mining. But, if this were the case, or even if the fear of it happening generates a massive exodus to other countries, the significant beneficiary would be the network.
The analyst Nic Carter, for example, assured via Twitter that the alleged departure of miners from Chinese territory would be 'excellent for the distribution of the hash rate' of Bitcoin in the world.
Carter evaluated that this exit of miners from the Asian country would reduce various negative narratives about the operation of Bitcoin, such as the alleged exposure to the control of the Chinese government. A better distribution of processing power in the world would change people's perception of Bitcoin, in his opinion.
In their most recent report on the state of the Bitcoin network, Coin Metrics researchers argue a thesis similar to the one that seems to have the most support among bitcoiners: better distribution of processing power would ultimately be beneficial to the network.
"If the Chinese government cracks down on mining, miners abroad will redistribute much of the power currently concentrated in China. A change in the distribution of processing power would not only make the Bitcoin network more decentralized. Still, it would also address one of the last remaining significant criticisms holding back BTC."
Will there be a problem with the bitcoin operation?
In turn, Adam Back, co-founder and CEO of Blockstream, dismissed the potential impact of the change in location of the bitcoin hash rate. For him, the presumption that Bitcoin is susceptible to the control of some State through miners misunderstanding of how the network works.
Despite this, Back said he did not understand how people were complaining about the departure of the miners from China and classifying the fact as something negative. Jiang Zhuoer, founder of the BTC TOP mining pool, also does not believe that this situation poses any threat to Bitcoin. The executive compared the Chinese government's attitude against miners to the measures they took against exchanges a few years ago.
In Zhuoer's opinion, the same thing will happen with the miners that happened with the exchange sites: they will migrate, remain active, and make China lose more and more relevance in the Bitcoin ecosystem.
"There will be no change to the Bitcoin network during the process, except that European and North American mining pools will rank higher than Chinese pools."
Jiang Zhuoer, founder of BTC TOP
Chinese mining pools are responsible for more than 60% of the processing power of the Bitcoin network. This accumulation of hash rate generates that, in the face of weather events, failures in Chinese locations, or the massive disconnection of equipment in the Asian country, the Bitcoin network loses an essential part of its hash rate in a short time. The larger the distribution, the less likely this will occur.
Clean mining gaining traction
Another US company, CleanSpark, which operates Bitcoin mining farms in the United States, closed an agreement to distribute wind turbines in North America and South America. The deal is part of the plan previously established by the company that all its facilities run on renewable energy, to reduce its carbon dioxide (CO2) footprint.
CleanSpark will use and commercialize the wind turbine systems of the Swiss company FlowGen, focused on creating cleaner renewable energy sources on sites that currently run on gas generators and other non-renewable energy sources. CleanSpark CEO Zach Bradford noted that the profitability provided by the company's dedicated Bitcoin division allows them to advance renewable energy sources. "We hope that the results of these works will have a positive impact on all of our business units," he said in a statement.
At the same time, the American company reported that it completed the purchase of a property of about 12 square kilometers, where the Atlanta Data Center operated. With the purchase, the company begins to realize its plans to maximize profits and minimize operating expenses. With this acquisition, the company ensures to save more than USD 50,000 per month in rent. "Which will result in a reduction of general expenses and more than 20% in our mining segment," the statement said.
The company suggests installing wind turbines at its new property to use renewable energy to operate the data center. They intend to put on the record that the energy produced by the wind "is the cleanest and lowest-cost combination for any American Bitcoin miner operating on a large scale."
CleanSpark acquired 2,400 Antminer S19-Pro to increase the capacity of its Bitcoin mining fleet. The company has scheduled the installation of the new miners for June 2021. They'll use the facilities that the company has just acquired in Atlanta.
'Green' Bitcoin mining grows in the US, as China worries about CO2.
CleanSpark has announced plans to use renewable energy for Bitcoin mining within hours of China publishing measures to combat and punish digital mining for cryptocurrency mining decisively. The measures indicate that data centers and power plants that offer support for cryptocurrency mining without informing it will have to be held accountable to the authorities.
The announcement surprised the crypto-asset mining industry, although there were already indications that the authorities were putting their magnifying glasses on farms operating in the country. Authorities consider Bitcoin mining a threat to China's ecological plans, as determined by a Chinese-American research team that studied the environmental impact of the mining industry.
The researchers explained their discoveries in an article published in the journal Nature Communications. They point out that the miners will have withdrawn from Chinese territory in 2024 to relocate their operations to other countries.
Meanwhile, projects have emerged exploring different ways to recover and reuse the waste heat emitted by mining equipment for Specific Applications Integrated Circuit (ASIC). With this, the birth of a new movement has been called the green mining of Bitcoin.