Bitmain now connecting hardware owners and mining farms
The World Digital Mining Map will put hardware owners and mining farms on the map.
Efforts at greening up Bitcoin and reducing its energy consumption have been stymied by the economics of the stuff.
When taken to theoretical extremes, Bitcoin would consume an entire sun's worth of energy to mine a single coin as long as it was profitable to do so. It doesn't matter how energy-efficient the machines are, because that doesn't mean they'll use less energy. Instead, it means they'll produce more hashes for the same amount of energy.
So while there are (probably) no academic studies around this particular line of reasoning, once you factor in the environmental footprint of the entire crypto miner manufacturing supply chain, all the raw materials and so on, Bitcoin mining would actually be more environmentally friendly if the mining rigs were on average less energy efficient, because it would mean fewer machines overall.
But now a new initiative from Bitmain, the world's largest crypto mining company by most measures, stands to potentially bring some beneficial environmental impacts to the mining ecosystem (or perhaps not). It's connecting mining hardware owners with mining farms through its World Digital Mining Map (WDMM) initiative, potentially giving existing machines a longer working lifespan.
"The WDMM will help make cryptocurrency mining more sustainable in the long-run by connecting mining farms and hardware owners in a whole new way. It is part of our commitment to provide miners with on-going support throughout their hardware's lifetime and to support the sector's overall growth," said Matthew Wang, Director of Mining Farm of Bitmain.
The WDMM will be launched on 8-10 October, at the World Digital Mining Summit, according to a press release.
For sale, barely used
There are three things that can happen to a Bitcoin miner (the machine, not the person) when it's no longer profitable.
If Bitcoin prices drop it might be temporarily switched off to await a more bullish near future, but if it's just no longer profitable in the current location it may be scrapped for parts, or it might be re-sold and shipped off to where energy costs are lower and it's still profitable.
A way of connecting mining hardware owners with farm operators may therefore help facilitate this secondary market, raising the working lifespan of a crypto mining machine.
Will it be overall environmentally beneficial? Perhaps not.
In another counter-intuitive twist, recycling those older mining machines may actually be overall detrimental for the environment, as keeping them in operation for longer means more energy is being consumed for Bitcoin mining at any given time.
Things often get counter-intuitive with Bitcoin mining, whose economics differ from anything else in existence, in that there's no finite cap on demand for the energy it consumes except that set by the combination of Bitcoin prices and mining profitability with today's technology.
The closest approximation is probably gold mining, but even that's completely different because when the world increases the energy it puts into gold mining it gets more gold out, which depresses prices and consequently means people pull energy back out.
Bitcoin has no such self-correction. With the possible exception of short periods between difficulty adjustments, the world gets the same amount of Bitcoin no matter how much energy is put into mining it and there's no finite demand for the product – the hashes – that is being mined.
It's an economic oddity that way.
For more academic reasons, these kinds of curiosities could make a digital mining map an interesting addition to the crypto ecosystem. One of the main reasons it's impossible to accurately track Bitcoin's actual energy use is because it's tough to get a clear picture of who's using which mining equipment where.
But for hardware owners and farm operators, these kinds of connections are of more immediate practical use.
"Being listed on the WDMM helped me to find miners who want to host their rigs in my facility. Bitmain was able to connect me with the right customers to fill in the extra capacity I had. This is the support I needed to help me expand my facility at a faster pace," said Gregory Ohanessian, CMO of VC Mining.
"Bitmain is our key partner. About 85% of the equipment in operation on our site is from Bitmain. In practice, we checked the reliability of this equipment, ease of operation, and highest efficiency. Bitmain not only sells equipment, but also helps us operate and maintain the equipment in the most efficient way, it helps us to further the output and reduce the down time of our customers’ miners,” added Dmitrii Ushakov, Chief Commercial Officer of Bitriver.
Disclosure: The author holds BNB, BTC at the time of writing.