What is 'mining using oil mining' that can earn more than 400 million yen a year and reduce CO2 emissions by 63%?



CNBC , an American news broadcaster, reports on a business that uses natural gas generated during oil drilling and wasted as electricity for Bitcoin mining to earn 460 million yen a year. .. CNBC has contacted the two young people who created the business to find out how they started the business and what was the key to their success.

23-year-old Texans made $ 4 million mining bitcoin off flared natural gas
https://www.cnbc.com/2022/02/12/23-year-old-texans-made-4-million-mining-bitcoin-off-flared-natural-gas.html

Part of the virtual currency (Bitcoin) can be obtained as a reward for 'mining' to solve complicated transaction calculations, but the calculation consumes enormous power, which contributes to global warming. It is often reported that it has become. For this reason, various environmentally friendly initiatives are being promoted, such as the emergence of some mining companies that are working with 'nuclear power generation' as a relatively environmentally friendly mining method.

As an eco-friendly power source where Bitcoin mining companies are moving to collaborate with 'nuclear power generation' --GIGAZINE



Brent Whitehead and Matt Rothrow started a Bitcoin mining business in 2019 in an oil field in eastern Texas when they were in their second year of college. At that time, it was thought that oil and gas companies working with Bitcoin miners was both avant-garde and big taboo. Meanwhile, Mr. Whitehead, an engineer of a family with a long history of oil and gas production, and Mr. Rothrow, a financial major who is crazy about Bitcoin, disregarded dissenting opinions and made all the cash earned in the side business. I put it into an oil and gas company called 'Giga Energy Solutions' that I founded.




Rostrow has focused on what to do if an oil and gas company accidentally collides with a natural gas formation while drilling oil, which has been a problem for many years. While oil can be transported by truck to remote areas, the transfer of gas requires a pipeline, so if the pipeline is not at a drilling site nearby, all natural gas will be wasted. It will be. In addition, if the gas is released as it is, it will be a heavy burden on the environment, so in many cases the gas is incinerated using gas flare , but even if gas flare is used, the greenhouse effect is only 75 to 90%. Because it is uncontrollable, the excavation site where the pipeline is not nearby is doing the same thing as throwing a large amount of money to burn gas to the dove, and it also has a double burden of adversely affecting the environment. I'm suffering.



So Rothrow sent an email to his classmate, Whitehead, who immediately consulted his father and started searching for flare gas. After preparing the necessary equipment, we made full use of our personal connections to promote 'monetization of gas disposed of by gas flare'.

Giga Energy Solutions' business, which started in this way, installed a transportation container full of bitcoin miners in the oil well, and when natural gas was generated, it was sent to the generator without burning, and the generator generated gas. It is converted into electricity and used as electricity for a bit coin digger. By utilizing the wasted natural gas as electricity, it seems that emissions can be reduced by about 63% in terms of CO2 compared to disposal by flare.




'As a person in the oil and gas industry, I've seen flare discharges from an early age. It's a new way to monetize gas as well as reduce emissions,' Whitehead told CNBC. We have signed contracts with these oil and gas companies and are in talks with government-affiliated funds, which are expanding rapidly. '

According to Steve Barber, founder of Upstream Data of Canada, which manufactures and supplies mining solutions, the success of Giga Energy Solutions lives on the often undervalued benefits of Bitcoin. First of all, since Bitcoin can be mined even with a stand-alone generator, the method of bringing the generator directly to the energy source like Giga Energy Solutions was adopted. In addition, large-scale mining requires large-scale equipment, but it is overwhelmingly easy to prepare and deploy compared to natural gas pipelines, and it is also easy to move, which is also a major factor for success. ..




In terms of the environment, the mining of Bitcoin has a great impact. Methane generated by gas is not completely burned by the combustion process, and part of it is released into the air. On the other hand, when methane is applied to an engine or generator, methane burns 100% and does not leak or be discharged into the air. However, because it is costly to acquire and maintain a generator, no producer uses a generator just for the sake of the environment. On the other hand, since Bitcoin mining can directly benefit from power generation, it is possible to make complete combustion of methane economically sustainable and to make the leaked and wasted gas a thing of the past.

According to Whitehead, Giga EnergySolutions' activities have once hit a snag due to the global blockade associated with the pandemic. Whitehead says it was difficult to get interested because it wasn't credible yet. Even so, we searched for small customers who were breaking the rules or wasting gas without getting permission, and devised ways to do it. And as a big turning point, when the price of Bitcoin exceeded $ 20,000 in December 2020, a major company asked to enter the business.

Many Bitcoin miners say oil and gas will dominate the mining industry in the coming decades. But on the other hand, Rothrow told CNBC, 'I think the next step will be for the energy producers themselves, who produce the electricity needed for mining, to become Bitcoin miners.'

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