A startup company plans to build a Bitcoin mining operation on Alaska’s North Slope that would consume as much electricity as the state’s largest coal plant produces, the Alaska Beacon reported.
What is Bitcoin mining?
Bitcoin mining uses powerful computers to create valuable cryptocurrency through a digital process. Unlike traditional mining, it doesn’t extract materials from the Earth.
However, these operations require massive amounts of electricity to power the specialized computers that solve complex mathematical problems, validate Bitcoin transactions, and earn new coins.
Why is this Bitcoin mine important?
This project marks the first large-scale cryptocurrency mining operation in Alaska and would test whether the state’s stranded natural gas resources can support what could become the nation’s largest Bitcoin mining facility.
The Wasilla-based company, Stax Capital Partners, has applied for permits to place shipping container-like pods with natural gas generators and computers about 30 miles south of the Prudhoe Bay oil field. Natural gas that’s currently going unused in the region would power the proposed 50-megawatt operation.
“What we’re doing is showing that there’s a large, viable, commercial opportunity based on infrastructure and resources that exist today,” Stax chief executive Sparrow Mahoney, who grew up in Alaska and previously worked in the cryptocurrency industry, told the Alaska Beacon.
How Bitcoin mining affects energy consumption and the environment
Bitcoin mining consumes enormous amounts of electricity globally, with operations often relying on carbon-heavy energy sources that contribute to climate pollution.
The Alaska project would burn natural gas that might otherwise remain unused, potentially creating new carbon output in the environmentally sensitive Arctic region.
“It just gets into this really problematic situation where, suddenly, we are burning gas that we wouldn’t otherwise burn, and we are not executing an energy transition,” Phil Wight, an energy historian at the University of Alaska, Fairbanks, told the Alaska Beacon.
If successful, Stax plans to expand the operation, aiming for a gigawatt of power generation — 20 times larger than the initial project and potentially larger than the current biggest U.S. Bitcoin mine, a 700-megawatt facility in Texas.
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How Alaska might benefit from Bitcoin mining
The project could create a new way for Alaska to profit from its stranded natural gas without building a massive $44 billion export terminal that has struggled to attract investors.
Alaska owns a royalty share of gas produced on the North Slope, typically at least 12.5%, which could provide revenue if sold to Bitcoin mining operations. For the state, this points to a way to monetize natural gas resources that currently lack the infrastructure to reach traditional markets.
However, critics of such a move point to the pollution that such a project would generate. According to a 2021 Thomas Reuters Foundation News report, researchers estimated that air pollution from dirty fuels “costs each American an average of $2,500 a year in extra medical bills.”
If you live in an area where cryptocurrency mining operations are proposed, research their energy sources and advocate for renewable power requirements to minimize environmental impact.
Contact your local representatives to voice your support for policies that require local data centers to use clean energy sources or offset their carbon footprint.
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