On any given day, Bitcoin uses an estimated 1/200th of all the electricity consumed on Earth. That means the cryptocurrency consumes more power annually than many countries. Why does it take so much energy to mine a Bitcoin? It’s, of course, complicated, but there is ultimately a simple answer: It’s by design.
Not all cryptocurrencies are designed the same, and Bitcoin was created with a “proof of work” design. This means that Bitcoin can be kept stable through decentralization, and that the files are openly shared so that all the computers in the network act as the bookkeepers of Bitcoin. Each new chunk of transactions is confirmed by a complicated set of equations that Bitcoin miners compete to solve. A new code to “solve” is sent out roughly every 10 minutes. The first miner to correctly calculate the unique answer to that set of equations, which require billions of operations, is rewarded with Bitcoin. This is essentially the mining process: New Bitcoin is created by doing the accounting of all the previously-created currency.
Newer cryptocurrencies typically use a different design for security of their unregulated decentralized networks. Instead of Bitcoin’s energy-exhaustive design, they employ what’s called a “proof of stake” system, which is estimated to require 99.99 percent less energy to calculate and maintain. This system was a massive development for crypto, but it also may have come too late, as Bitcoin is by far the industry leader and worth more than all the other cryptocurrencies combined.
While there’s still some debate around exactly how energy-intensive Bitcoin is, there are also disagreements over how “green” it is. In 2019, one report found that 73 percent of the energy used to mine Bitcoin came from renewable resources like wind, solar, geothermal and hydro. However, a newer report from last year put the rate of green energy at 39 percent.
Before China banned Bitcoin mining, it’s estimated that along with Russia, Iran and Kazakhstan, the four nations were responsible for 80 percent of the power consumed worldwide to mine Bitcoin. With China out of the bitcoin mining game, many Chinese miners are setting up shop overseas in a place where there is cheap energy, ample space for their warehouses of computers and the sort of government leaders who put business over the environment: Texas.
However, as evidenced by the Big Freeze last winter, Texas is quite vulnerable to power outages. The state has scheduled new renewable energy projects that will bring 16 megawatts of power to the grid, but if all that new renewable energy is gobbled up by Bitcoin miners, it does very little for the people of Texas. Currently, Senator Ted Cruz and other state lawmakers are courting Bitcoin mining operations in Texas and inviting new ones in. But Cruz is a fan of creating power using oil industry byproducts — gases that are typically burnt-off or “flared” in order to protect against dangerous backups of pressure.
There are obviously far greener options. In order to investigate one of the other potential ways that Bitcoin can truly go green, I recently spoke with Bill Smith, founder of XcelPlus International Inc., a company that creates plasma gasification units that can be used to power Bitcoin operations by burning trash and waste. In short, he plans to clean up dumps, landfills and toxic waste sites and then use that refuse to power Bitcoin mining operations.
From the outside, it looks like things are changing in Texas. But how does it look from the inside? Is Texas now at the forefront of Big Green Energy?
It does. Right now, I’m at the Texas Blockchain Summit, and that’s what this conference is all about — how Texas is opening the doors, adopting legislation that’s favorable to crypto and adopting Green energy technology, rules, regulations and laws.
Our goal is to get everything in place to where mining doesn’t take away the solar or the wind and cleans up the environment at the same time. Because if we can keep the miners off the grid, the grid will never know they were there, and they don’t have to shut down if wind slows down or solar slows down or the grid says, “Hey, wait a minute. We need the power back.”
Can you explain how your system is different, and how it can bolster the grid?
We have all these Chinese nationals moving to America, particularly into Texas, because we have plenty of ample solar and wind. But when you look at when they went into Kazakhstan, they sucked up all the excess energy within a few weeks. So they will be here, drawing on that extra energy and that’s where we’re trying to come in and turn all the waste in the landfills into consistent power. We can do that at small power amounts, like 5 megawatts, up to 150 megawatts, and it’s all generated from waste.
And the waste supply for you guys doesn’t matter at all? It could be biofuel or biomass. It could be any type of hydrocarbons, correct?
Correct. Everything is basically a connection of molecules, right? From wood to plastics to coal. Our gasifier is basically heated up to the point, under a low to no oxygen situation, where the molecules are ripped apart. Then we wind up with carbon, oxygen, nitrogen, sulfur, chlorines, whatever — basic elemental building blocks. And then, inside our gasifier, we combine those into what’s called syngas, which is carbon monoxide, carbon dioxide and hydrogen. And you can burn that like a fuel.
So we can run this through turbines or caterpillar gen-sets and produce electricity. We’re also looking at a technology out of California. We can run the syngas through what’s called a Fischer-Tropsch System, and we can make clean synthetic diesel fuel, jet fuels, ethanols and gasoline.
We’re looking at a project in Louisiana right now as well. They want to process a million tons of sugar cane to gas. We’ll be developing their system, too. So we can actually create multiple types of fuels out of any type of waste feedstock.
With the waste feedstocks, are there preferable ones and dirtier ones, the way there is with oil?
No, we can take chemical sludge out of chemical plants. We can take hazmat. In fact, the company we acquired the technology from was processing at a plant in Hannibal, Missouri, Class 1 through 5 HAZMAT. So we can take some really nasty stuff — waste fuels, waste gases, paints, thinner, solvents — and process them into syngas.
Does your process create any byproducts or leftovers?
We wind up with an inert ash that we can sell to cement companies to be added into kilns. We don’t have to do a lot of pre-sorting on the front end. If you look at a lot of big industrial gasifiers, you’ve got to sort out the metals, certain plastics, etc. In fact, we’re bidding on a military project in Florida. The front-end sorting system was $18 million. So with our process, we got rid of all of that. We just have a shredder and a conveyor belt. We take all the waste in, and we sort the metals out on the tail end magnetically. Then we can use vibrations to take out any glasses and stuff like that. So the resulting ash is a clean, inert ash.
You credit a lot of tech used in your process to a plasma physicist named Christian Juvan.
Christian developed the torches we use for the gasification process and patented that. His technology is probably more advanced than anyone else’s on the market. We’ve taken some of his technology and built and designed this machine, which we’re getting ready to start building here probably within 30 days.
How did you attract a scientific mind like Juvan’s to your project?
I gave out two business cards one night, and this guy called me up about a week or so later. He said, “Why do I have your card?” And I’m like, “I don’t know. Who the hell are you?” He said, “My name is Christian Juvan.” I said, “So?” He responded, “Google me.” He’s the grandfather of plasma physics. He said, “I’ve been eating at this restaurant for 20 years. It’s called Hobee’s in Cupertino.” I told him, “I’ve never been there in my life.” He said, “Your card was on my table this morning.” And that’s how we connected for this project.
So what are you two doing together now that fate has brought you together?
One of the great things about this gasifier is it’s a thermal chemical process. So we actually pass the syngas through the ash, which acts as a scrubber. That’s where we trap the chlorines, the sulfurs and things like that, just to release the carbon products we want and the hydrogen. That was one of the things that Christian designed and patented years ago that nobody’s ever replicated. So now, we own those patents. We’re going to be combining that with and bringing out other technologies I’ve been vetting for years. Once this thing launches, we’ll bring out a technology from Germany that allows you to just throw plastic chairs, tires and stuff, and it turns it into diesel fuel.
Texas conservatives seem to like Bitcoin and are backing Big Oil’s involvement in the future of Bitcoin, but what does the state’s environmentalist community think? Are they on board with you guys — does they see you as a truly Green energy?
They’re all looking for new forms of energy. And honestly, nobody’s ever talking about garbage, because it’s garbage. We’re starting in Texas because the oil industry is pulling in their horns. A lot of the fabricators for the oil industry are out of work. This one big shop we went to normally ran 200-some employees, and they’re down to 90. It’s hard to find work, so we’re coming in saying, “Hey, we want to build hundreds of these things.” Basically, we’re going to take the Henry Ford approach: Create an assembly line and build these things so that we can get them to the market and deploy, literally, within days.
You’re gonna meet with Ted Cruz in a few weeks. When you sit down with him, do you imagine that you’ll have to educate him on why your tech is so much better for the future of Texas, Bitcoin and energy generation?
Yes. Because if you say — “Hey guy, I want to take garbage and make electricity,” he’ll look at you like, “What stupid planet did you fall off of?” But this science goes back. Like Fischer-Tropsch goes back to the 1920s. These German guys invented a way to take coal, gasify it, run it through a catalyst, and make enough diesel fuel for the Germans to fight the entire war.
So, a Nazi formula for gas may save the future?
There are 10,000 landfills across the country. One thing we don’t have a shortage of is garbage. There are 400 plus landfills in Texas that are closed. So we look at them as upside-down oil wells. We go and uncap them, take all the garbage out and turn it all into energy so we can help support the grid in Texas. And we can do that in any state.
We can put out almost 50 megawatts from garbage. We found another turbine by GE that puts out 100 megawatts. So all we have to do is add more gasifiers to produce enough energy to drive those turbines. Then, we add about 50 percent more volume, and now we can put up to 150 megawatts per package. That means, eventually, all the new solar and wind can stay on the grid. We can add to the grid, but we can keep the crypto guys off the grid by having them use their own private power supplies.