5 ms·

23-year-old Texans made $4M last year mining BTC off flare gas from oil drilling

46 points by rmason 5y ago

sharmin123 5y ago
ouid 5y ago
This is certainly odd, but I feel like the article expects that you will get some sort of warm fuzzies from this? This usable energy was turned into heat by a crate of asics rather than just being combusted.
- Grimburger 5y ago
  Somewhat strange if someone can't see the value in that, they are displacing more harmful sources of cryptocurrency hashing, while also creating value out of waste. They are also giving fracking and drilling companies a reason to rein in fugitive emissions of methane which plague the industry.
  - jtsiskin 5y ago
    Taxes should provide the reason to rein in fugitive emissions. If the negative externalities were properly priced in, they would already be reducing the methane pollution. I’m pretty skeptical they are “creating value” - at this point increasing the hash rate adds approximately 0 marginal security.
    - xyzzy123 5y ago
      I think the relevant taxes might be fairly difficult and expensive to enforce. Agree it seems to only be a net win if it displaces other, even more wasteful mining.
    - bagacrap 5y ago
      if you can find a way to turn methane into something useful (ie sellable) that will probably work better than taxes, because it applies regardless of jurisdiction and because taxes can always be cheated (e.g underreport your emissions) whereas corporations will always earnestly chase profits
  - neilwilson 5y ago
    Isn't that just creating more electronic waste that has to be disposed of or recycled? Now what will be clever is using the flare divert technology to distill a portable energy source from that electricity that can be used for more productive uses. Creating a block of some reactive X that can more easily be shipped than the gas that created it. Crypto is like motor sport is to car production. It's mostly pointless in itself, but may lead to technology improvements in computer science that can be employed usefully elsewhere. Costless atomic swaps between existing banks for example.
    - skybrian 5y ago
      Once the equipment is paid for, they could keep running the generator even if it's not competitive anymore. The fuel is free and they still need to burn off the methane. If the electronics needs be taken out, I suppose there are heaters that are lower maintenance. But maybe someone decides that the generator is worth reselling?
  - gregable 5y ago
    There is no "displacing" going on. The amount of hashing going on is independent of the amount of BTC mined or transactions verified per unit time. Until such time that the hashrate rises to the point that BTC mining costs more than the power to run the same miners, nobody will be turning off the machines. Unfortunately that hasn't happened and won't for years ( barring BTC price drops).
    - skybrian 5y ago
      It remains to be seen, but why couldn't flare-gas mining drive up the hashrate if it becomes popular?
    - deleted 5y ago
      [deleted]
    - iopq 5y ago
      The difficulty increases pushing out inefficient miners who no longer can afford to mine due to electricity costs. This is a process that always happens.
      - gregable 5y ago
        Eventually, but at current prices existing hardware mines at well above electricity prices, so that won't happen any time soon.
  - Aterio 5y ago
    What value? Why do people think it is better to make Bitcoin out of that gas and consume more energy due to hardware and required ac instead of catching it and actually using it. Nothing was Gaines by this. Nothing for you, nothing for me. We even got owned by this dick. Guess who will feel the effects of clima change? All of us
twomoonsbysurf 5y ago
janandonly 5y ago
Good for him. Also, I wish all methane was used for energy production instead of just leaking into the atmosphere, where it becomes a potent greenhouse gas. Most laws to that effect have failed up until now in many parts of the world. Maybe bitcoin mining is finally the reason for these oil barrons to start taking flaring more seriously. For more info see also: https://swacash.com/2021/06/13/bitcoin-on-the-assault-on-lost-methane/ https://swacash.com/2021/06/13/bitcoin-on-the-assault-on-los...
- mxschumacher 5y ago
  for methane the issue are leaks (natural gas getting into the atmosphere), not so much flaring (combusting natural gas, releasing Co2)
caseyf7 5y ago
And how many million have they sunk into this to generate $4M?
- rurban 5y ago
  This year they'll make $20M. That's after expenses
  - deleted 5y ago
    [deleted]
- givehimagun 5y ago
  "The green focus appears to be helping Crusoe, which recently raised $128 million to help expand its flare capture technology to more than 100 units, from around 40 currently. Investors included Valor Equity Partners, Bain Capital, and the Agnelli family's Exor." https://markets.businessinsider.com/currencies/news/bitcoin-mining-flare-gas-btc-energy-crusoe-energy-coinbase-winklevoss-2021-6-1030537177 https://markets.businessinsider.com/currencies/news/bitcoin-...
labrador 5y ago
This sounds too good to be true. There's a lot to do to turn flare gas into stable electrictal output, but they make it sound easy.
Aterio 5y ago
We live in a society were people believe making gas into bitcoins is a good thing? :-( We should not have allowed to allow burning this on the spot ever. We would now have cost effective counter measures or storage system for it.
- isitmadeofglass 5y ago
  > We should not have allowed to allow burning this on the spot ever. You do understand that the alternative is the rig blowing up at times right? Kinda feels like arguing we need to reduce animal suffering by burning down the rainforest so there’s no animals left that can suffer.
  - Aterio 5y ago
    Yes! Of course the Alternative is not to catch it and transport it away and use it but the expectation that the rig would blow. Not sure how you came up with this one, funny. You know they are not doing it because its more effort and less profit right? We are able to catch gas, store and transport it.
    - scotty79 5y ago
      > We are able to catch gas, store and transport it. Great. Now you need to find way to make it profitable. You could force-entangle it with something profitable with a law. For example you could say that if you own a well you must not burn the gas, but you must capture it and transport it at least some distance before it's burned. Then people would have incetive to find a buyer that will burn it to get some utility out of it (heating something probably). But! That law would reduce profits of rich people in USA and since only rich people in USA decide which laws are created (they can practically veto all laws they oppose) no such law will be created. So you have two options. Either wells will be just burning gas for nothing except turning more potent greenhouse gasses like methane into less potent one like CO2. Or you can burn it and mine bitcoins. Which makes bitcoin less profitable for everyone else since all miners compete for a fixed number of bitcoins. If bitcoin mining is less profitable other miners must look for cheaper energy to keep mining which means laeger percentage renewables at peak production times. So in current political reality of USA this news is actually good news despite everything. Another positive factor in using this gas to mine bitcoin is that it turns that gas into valuable resource, so there's no incentive to "loose" it due to leaks accidental or intentional and that would be the case if you tried to force owners to transport it away to somewhere where it's useful. And this gas, as I mentioned, is more potent greenhouse gas than CO2 produced by burning it.
pcdoodle 5y ago
Smart Kid!

46 points by rmason 5y ago

ouid 5y ago

This is certainly odd, but I feel like the article expects that you will get some sort of warm fuzzies from this? This usable energy was turned into heat by a crate of asics rather than just being combusted.

Grimburger 5y ago
Somewhat strange if someone can't see the value in that, they are displacing more harmful sources of cryptocurrency hashing, while also creating value out of waste. They are also giving fracking and drilling companies a reason to rein in fugitive emissions of methane which plague the industry.
- jtsiskin 5y ago
  Taxes should provide the reason to rein in fugitive emissions. If the negative externalities were properly priced in, they would already be reducing the methane pollution. I’m pretty skeptical they are “creating value” - at this point increasing the hash rate adds approximately 0 marginal security.
  - xyzzy123 5y ago
    I think the relevant taxes might be fairly difficult and expensive to enforce. Agree it seems to only be a net win if it displaces other, even more wasteful mining.
  - bagacrap 5y ago
    if you can find a way to turn methane into something useful (ie sellable) that will probably work better than taxes, because it applies regardless of jurisdiction and because taxes can always be cheated (e.g underreport your emissions) whereas corporations will always earnestly chase profits
- neilwilson 5y ago
  Isn't that just creating more electronic waste that has to be disposed of or recycled? Now what will be clever is using the flare divert technology to distill a portable energy source from that electricity that can be used for more productive uses. Creating a block of some reactive X that can more easily be shipped than the gas that created it. Crypto is like motor sport is to car production. It's mostly pointless in itself, but may lead to technology improvements in computer science that can be employed usefully elsewhere. Costless atomic swaps between existing banks for example.
  - skybrian 5y ago
    Once the equipment is paid for, they could keep running the generator even if it's not competitive anymore. The fuel is free and they still need to burn off the methane. If the electronics needs be taken out, I suppose there are heaters that are lower maintenance. But maybe someone decides that the generator is worth reselling?
- gregable 5y ago
  There is no "displacing" going on. The amount of hashing going on is independent of the amount of BTC mined or transactions verified per unit time. Until such time that the hashrate rises to the point that BTC mining costs more than the power to run the same miners, nobody will be turning off the machines. Unfortunately that hasn't happened and won't for years ( barring BTC price drops).
  - skybrian 5y ago
    It remains to be seen, but why couldn't flare-gas mining drive up the hashrate if it becomes popular?
  - deleted 5y ago
    [deleted]
  - iopq 5y ago
    The difficulty increases pushing out inefficient miners who no longer can afford to mine due to electricity costs. This is a process that always happens.
    - gregable 5y ago
      Eventually, but at current prices existing hardware mines at well above electricity prices, so that won't happen any time soon.
- Aterio 5y ago
  What value? Why do people think it is better to make Bitcoin out of that gas and consume more energy due to hardware and required ac instead of catching it and actually using it. Nothing was Gaines by this. Nothing for you, nothing for me. We even got owned by this dick. Guess who will feel the effects of clima change? All of us

twomoonsbysurf 5y ago

janandonly 5y ago

Good for him. Also, I wish all methane was used for energy production instead of just leaking into the atmosphere, where it becomes a potent greenhouse gas. Most laws to that effect have failed up until now in many parts of the world. Maybe bitcoin mining is finally the reason for these oil barrons to start taking flaring more seriously. For more info see also: https://swacash.com/2021/06/13/bitcoin-on-the-assault-on-lost-methane/ https://swacash.com/2021/06/13/bitcoin-on-the-assault-on-los...

mxschumacher 5y ago
for methane the issue are leaks (natural gas getting into the atmosphere), not so much flaring (combusting natural gas, releasing Co2)

caseyf7 5y ago

And how many million have they sunk into this to generate $4M?

rurban 5y ago
This year they'll make $20M. That's after expenses
- deleted 5y ago
  [deleted]
givehimagun 5y ago
"The green focus appears to be helping Crusoe, which recently raised $128 million to help expand its flare capture technology to more than 100 units, from around 40 currently. Investors included Valor Equity Partners, Bain Capital, and the Agnelli family's Exor." https://markets.businessinsider.com/currencies/news/bitcoin-mining-flare-gas-btc-energy-crusoe-energy-coinbase-winklevoss-2021-6-1030537177 https://markets.businessinsider.com/currencies/news/bitcoin-...

labrador 5y ago

This sounds too good to be true. There's a lot to do to turn flare gas into stable electrictal output, but they make it sound easy.

Aterio 5y ago

We live in a society were people believe making gas into bitcoins is a good thing? :-( We should not have allowed to allow burning this on the spot ever. We would now have cost effective counter measures or storage system for it.

isitmadeofglass 5y ago
> We should not have allowed to allow burning this on the spot ever. You do understand that the alternative is the rig blowing up at times right? Kinda feels like arguing we need to reduce animal suffering by burning down the rainforest so there’s no animals left that can suffer.
- Aterio 5y ago
  Yes! Of course the Alternative is not to catch it and transport it away and use it but the expectation that the rig would blow. Not sure how you came up with this one, funny. You know they are not doing it because its more effort and less profit right? We are able to catch gas, store and transport it.
  - scotty79 5y ago
    > We are able to catch gas, store and transport it. Great. Now you need to find way to make it profitable. You could force-entangle it with something profitable with a law. For example you could say that if you own a well you must not burn the gas, but you must capture it and transport it at least some distance before it's burned. Then people would have incetive to find a buyer that will burn it to get some utility out of it (heating something probably). But! That law would reduce profits of rich people in USA and since only rich people in USA decide which laws are created (they can practically veto all laws they oppose) no such law will be created. So you have two options. Either wells will be just burning gas for nothing except turning more potent greenhouse gasses like methane into less potent one like CO2. Or you can burn it and mine bitcoins. Which makes bitcoin less profitable for everyone else since all miners compete for a fixed number of bitcoins. If bitcoin mining is less profitable other miners must look for cheaper energy to keep mining which means laeger percentage renewables at peak production times. So in current political reality of USA this news is actually good news despite everything. Another positive factor in using this gas to mine bitcoin is that it turns that gas into valuable resource, so there's no incentive to "loose" it due to leaks accidental or intentional and that would be the case if you tried to force owners to transport it away to somewhere where it's useful. And this gas, as I mentioned, is more potent greenhouse gas than CO2 produced by burning it.

pcdoodle 5y ago

Smart Kid!