Geothermal Energy for Bitcoin Mining: Advantages, Limitations, and Future Prospects

Published on 28 April 2023 by masternode.one in Research

Sustainable energy series, pt. 1

Introduction

Bitcoin is being hailed by some as the potential future of money. With its ability to operate without a central third party, it allows for faster, cheaper and more efficient transactions, while simultaneously providing more monetary freedom to its users. However, the process of mining bitcoin requires large amounts of energy, which has raised concerns about its potential impact on the environment, particularly in light of the current climate crisis. Bitcoin miners have been exploring various innovations to reduce their energy footprint and mitigate the environmental impact of the mining process. In our “sustainable energy”-series we will evaluate the most popular alternatives, including geothermal energy, wind- and solar power, hydropower, and energy from biomass.

In this first article of the series, we will examine the potential of using geothermal energy for mining purposes by highlighting some of the research in this field, exploring advantages and disadvantages, and by evaluating the potential geothermal energy has as a more sustainable energy source for mining.

About geothermal energy

What is geothermal energy?

Geothermal energy is power that is derived from the heat below the earth’s surface, stemming from the magma that forms the layer between the earth’s core and crust. This heat can be used to heat up water in order to provide warm water or heating for buildings, or it can be used to generate electricity with. Generating electricity from geothermal heat happens by drilling wells into the earth where hot water or steam can be pumped up towards the surface.

Is geothermal energy sustainable?

Geothermal energy is considered to be a sustainable and renewable energy source, as it has a minimal environmental impact and produces very little greenhouse gas emissions. Geothermal energy is also viewed as a very reliable source of power, because, unlike wind and solar energy, which are dependent on weather conditions and variable in their output, geothermal energy is available 24/7 and can be harnessed continuously. In extension of this, power derived from geothermal forces is not subject to changing climatic conditions.

The above mentioned characteristics make geothermal energy a very sustainable source of power compared to traditional energy sources, such as fossil fuels. Moreover, since geothermal power plants do not produce long lasting waste of any kind, they are also a greener alternative for nuclear power.

The potential of geothermal energy for bitcoin mining

Now that we know what geothermal energy is and what sustainability advantages it has over traditional energy sources, let’s look at the role geothermal energy can play in mining of bitcoin and other crypto currencies by looking at the cause of the energy use, and the possible advantages and limitations of geothermal energy.

Why does mining require so much energy?

To understand how geothermal energy can make bitcoin mining less straining on the environment, it is useful to know why bitcoin mining requires such a significant amount of energy. The answer to this question originates from the proof of work consensus mechanism that bitcoin uses. Proof of work requires miners to solve complex mathematical equations in order to validate transactions and add them to the blockchain. This process is resource-intensive, because the hardware that miners use needs to have large amounts of computational power to continually perform millions of calculations per second to compete with other miners on the network. In addition to this, energy is needed for the cooling of mining installations and to power other infrastructure needed for this process.

Advantages of geothermal energy for bitcoin mining

Sustainability

One of the main advantages of using geothermal heat to power bitcoin mining facilities is that this type of energy source has a small environmental footprint. As mentioned before, geothermal heat is a renewable source, and generating electricity from it releases little to no greenhouse gasses and other waste. Considering the current climate crisis and the stress that the retrieval and burning of fossil fuels puts on the environment, it is of great importance to switch to more sustainable energy sources.

Reliable

Another advantage of geothermal energy is that it is a very reliable source of power; it is not dependent on weather conditions and it has no limit on its supply. Since bitcoin mining is a process that continues day and night, reliable energy that can be generated 24/7 is crucial.

Low operating costs

The operating costs associated with geothermal energy are relatively low due to the fact that geothermal power plants have a high capacity factor: they can generate electricity continuously throughout the year. Furthermore, the cost of fuel is not a factor for geothermal power plants, as the heat used to generate electricity is derived from the earth’s internal heat.

The maintenance costs associated with geothermal power plants are also relatively low, because the technology is well-established and the systems are relatively simple and require little maintenance. Finally, geothermal energy systems have a long lifespan, typically around 30-40 years, which means that the cost of capital investment can be spread over a longer period of time.

Possible limitations on geothermal power for mining

Energy transportation costs: geography restricts geothermal energy sources

One of the major restrictions on the use of geothermal energy for bitcoin mining is that geothermal sources are strictly bound by geography. Geothermal energy can only be harnessed in areas where there is sufficient geothermal heat relatively close to the surface, typically in regions of volcanic activity or tectonic plate boundaries. This means that only certain areas of the world are suitable for the development of geothermal energy resources, limiting its potential as a widespread energy source. The transportation of geothermal energy from its source to a bitcoin mining facility far away comes with high expenses and might therefore not be as attractive or feasible.

However, since bitcoin mining is a process that is not bound by geographic factors, it that can be done anywhere. Bitcoin miners can set up their mining facilities near existing geothermal sources to profit from this sustainable energy source. Some of the earth’s well known hotspots of geothermal energy are Iceland, and the Geysers in California, USA.

High initial cost of energy retrieval

Besides being restricted by geography, the development of geothermal energy resources requires significant upfront investment in drilling and infrastructure, which can make it a less attractive option for regions with limited resources or where the cost of developing geothermal resources is high. This hinders the widespread use of geothermal energy.

On the other hand, once a geothermal power plant is established, the costs of maintaining operation are relatively low, as was mentioned in the advantages above.

Possible dangers of geothermal energy use

Though the use of geothermal heat as a source of power is usually a safe and well-developed process, there can be risks, such as the possibility of the release of geothermal fluids containing chemicals or other pollutants. It may require additional investments to reduce these risks.

Conclusion

Given the current climate crises and degradation of nature worldwide, it is evident that the world is in need of change, including a switch to more sustainable sources of energy. This issue is very relevant to bitcoin mining, as this is a process that requires large amounts of energy. Geothermal energy is one of the sustainable sources that can provide an alternative to traditional energy sources such as fossil fuels.

Despite the limitations, the future prospects for geothermal energy as a power source for bitcoin mining are promising. The growing demand for sustainable energy sources, combined with the increasing awareness of the environmental impact of traditional energy sources, is driving the development of geothermal energy resources. In addition, advances in geothermal technology, such as enhanced geothermal systems, could help to expand the range of locations where geothermal energy can be harnessed, making it more widely available as an energy source for bitcoin mining. The decreasing costs of renewable energy technologies, coupled with the increasing efficiency of bitcoin mining hardware, could make the use of geothermal energy for bitcoin mining more economically viable in the long run.

In short, geothermal energy has the potential to play an important role in the transition to a more sustainable and low-carbon energy future, which will eventually benefit all beings on this planet.