Here are six new “green” projects looking to reduce Bitcoin (BTC) Mining’s energy footprint

The environmental impact of bitcoin mining was trending again in recent weeks due to a Texas law seeking to limit online participation and a New York Times article condemning the industry.

To critics, bitcoin’s proof-of-work algorithm is wasteful as the demand for electricity continuously increases. For industry advocates – it’s a feature, not a bug – as it secures the network while ensuring decentralization.

There is a third camp that sees bitcoin’s energy consumption as an opportunity. A number of new products and companies are trying to reduce their environmental impact with several innovative solutions that build on what is already in place to help miners become more sustainable.

Some of these projects create or exploit market instruments that stimulate making bitcoin more “green”, while others are technical, centered around improving efficiency and synergies around reusing the heat generated by the data centers.

One such product, offered by crypto lender BlockFills and fund Isla Verde Capital, aims to help not only miners but also investors find a “green” solution for their energy use.

The offer is mainly tradable environmental assets in the form of carbon emission offsets and renewable energy credits (RECs). Carbon credits, assets that represent sequestered greenhouse gases through projects such as afforestation, are as well known as they are criticized.

Renewable energy credits (RECs) represent ownership of the sustainability of produced electricity. These certificates represent 1 megawatt hour (MWh) of power produced from renewable sources such as wind, water and solar. They are usually separate from any power purchase agreements and are usually traded over the counter (OTC).

BlockFills and Isla Verde Capital tailor the purchase of RECs and carbon credits to miners’ needs, then retire them later so they can make renewable energy claims.

The RECs are also targeting bitcoin investors. “Massive asset managers” are now looking at bitcoin, but they have these sustainability mandates that they have to follow, BlockFill’s John Divine said. The RECs can help them invest comfortably.

This could actually raise the price of RECs, “which directly incentivizes investment in renewable energy technology,” Divine said.

Switzerland-based Block Green is another project that tries to stimulate sustainable mining through a decentralized lending protocol. On their platform, liquidity providers looking for bitcoin-native investments can buy future hashrate over a specified time period, or computing power.

The platform includes “know-your-miner” information about a company’s finances, operational data, their energy extraction and strategy. Block Green believes that market mechanisms on the platform will encourage sustainable mining as liquidity providers will choose miners with sustainable operations, lowering their capital costs.

“We are currently working with some of the largest miners in the US and Canada, and we have begun integrations with institutions such as custodians, exchanges and asset managers who want to give users access to transparent and scalable” returns on their bitcoin, a company spokesperson said .

Another solution that uses financial incentives is offered by the Clean Incentive and Sustainable Bitcoin Protocol (SBP). These companies are trying to promote investment in “clean” bitcoin by creating new, blockchain-based assets that miners can trade to leverage the use of renewable energy. Investors who want to verify owning environmentally conscious bitcoins are suitable for these assets.

Similarly, Clean Incentive appears to “collect, validate and tokenize ESG [environmental, social, and governance] attributes” from a network of miners, said founder and CEO Casey Martinez, a data scientist with a background in renewable energy.

The startup is still in stealth mode but has already brought on more miners, Martinez said Clean Incentive partnered with a small miner from Canada, Ocean Falls Blockchain, in November.

Some of the more technical solutions that companies offer include both hardware and software related products.

Immersion cooling company LiquidStack offers a hardware-based cooling solution that can cut the energy used by the computers in bitcoin mines by 40% and reduce their land use by a third, the company said in March.

For every megawatt (MW) of energy used for the actual computing in a data center, LiquidStack’s solution uses 0.02 MW for cooling, while other options use 0.1 MW to 0.7 MW, LiquidStack said.

“What made LiquidStack attractive was its potential to improve data center sustainability, including bitcoin mining, and its innovation,” said Amber Mulligan, VP of Strategic Sales and Marketing, Commercial HVAC Americas at Trane.

LiquidStack’s technology also makes heat reuse easier and more efficient, opening the door to a number of synergies for miners, Mulligan said, noting that because the heat is actually managed with fluids instead of traditional air cooling, it captures and directs it to other uses. easier.

On the software side, Vancouver-based mining services firm Lincoin has created a program that miners can use to manage their operations more efficiently and profitably, including their participation in demand response programs and heat recycling activities.

Demand response is when a miner, or another energy consumer, shuts down operations during periods of high demand, so that the grid can meet the consumption needs. Often miners get paid for this. Heat reuse refers to the practice of using surplus heat from a mining operation for another activity, such as greenhouse operation.

The software, called Rails, integrates real-time data from over 20,000 grid nodes in 9 deregulated electricity markets in the US and Canada, a press release said.

“Large-scale miners use Lincoin to monitor real-time profitability, manage and optimize their operations, streamline tasks and participate in online services, while smaller miners use Lincoin to innovate by managing greenhouse heat, monetizing their surplus solar energy generation, or simply mining intelligently,” CEO Medi Naseri said in an email interview with CoinDesk.