A symbiotic relationship is burgeoning in North America between oil and natural gas producers and miners of the cryptocurrency Bitcoin.
Both groups are seeking to capitalize on immense volumes of excess and/or stranded natural gas flared off or shut in by a lack of infrastructure. Bitcoin mining offers a new outlet for this gas at the wellhead, with no need to invest in pipelines, compressor stations or liquefaction.
“Our goal is to monetize the gas as well as solve some of the environmental problems of leaking wells and flared gas,” said EZ Blockchain CEO Sergii Gerasymovych. The company uses excess natural gas to power its onsite bitcoin mining operations at several production sites throughout North America. “It’s not just a one-way road here…I do want the oil and gas producers to participate in this industry.”
“Mining” in this context refers to the energy-intensive, round-the-clock process through which specialized computers verify bitcoin transactions. The process allows miners to add “blocks” of the distributed public ledger, aka the blockchain, on which transactions are recorded.
The Bitcoin network currently rewards miners with 6.25 Bitcoin per block, plus transaction fees. A new block is added to the chain about every 10 minutes on average, and the reward is how new units of the digital currency enter into circulation. The price of one bitcoin was around $33,000