Bitcoin is considered an energy-demanding network. This has brought negative attention from politicians, regulators, institutions, and individuals that claimed the digital asset is contributing to global warming.
However, there are many trying to harness the Bitcoin network to create sustainable systems and mechanisms using renewable energy. The Cathie Wood-led Ark Invest has been at the forefront of these efforts.
These resources could be used to power the Bitcoin network, incentivize network participants to secure the asset, and transform what otherwise would be wasted energy into a useful resource. As seen below, there are 265 billion cubic meters of natural gas wasted each year.
Around half of these wasted natural gas comes from methane emissions while the other half originates from gas flaring emissions. As Korus noted, the Bitcoin network only needs 25 billion cubic meters of natural gas to operate.
Natural gas flaring is an important part of the processes that support the oil and gas industry. Companies use this mechanism to dispose of unwanted components and to run maintenance, testing, and safety processes in oil wells.
Thus, Korus believes Bitcoin miners should use methane emissions and convert them into electricity. This would represent a significant improvement for the sector in terms of electricity cost and incentivize more operators to adopt this mechanism, which would contribute to the reduction of carbon emissions. Korus wrote:
Our research suggests that installing natural gas generators at well sites and using methane that otherwise would be vented could generate electricity at a cost much lower than public bitcoin mining companies pay today.
This implementation is more practical than building entire infrastructures to transport the gas or move entire populations near oil wells. Mark Le Dain, Vice President of Strategy at oil company Validere said the following about the potential for Bitcoin to contribute to carbon emission reduction:
It helps cut emissions at (an oil) producer level, but also globally by reducing mining in parts of the world where coal is likely the power source (…).
Korus believes regulators should encourage this model by introducing “carbon abatement pricing plans” and incentivizing more BTC miners to work with the oil industry. At the time of writing, BTC’s price trades at $21,600 with a 4% profit in the last 24 hours.