Where miners once stood to mine olivine, computer equipment has currently taken centre stage.
Located within the fjords of Norway is a former olivine mineral mine that began its operations in the late 1970s. Fast-forward to the 21st century and that mine has been converted into an underground data centre for something different: Bitcoin mining that's efficient and sustainable.
Frankfurt-based Northern Bitcoin is the company behind the Lefdal Mine in Norway that's challenging the status quo of Bitcoin mining and redefining it. Based in 2015, Northern Bitcoin is creating sustainable infrastructure available to Bitcoin and the blockchain. In order to achieve this it operates a mining pool and its own mining hardware in the Lefdal Mine powered by renewable energies, beneath cost-efficient and secure conditions.
And what better place to do this than a country that's surrounded by mountains, glaciers, and deep coastal fjords? With year-round cool temperatures and an more than renewable energy available at affordable costs, Norway is showing that it’s doable to mine for Bitcoin in a clean and CO2-neutral fashion.
Showing me round the Lefdal Mine, Mathis Schultz, chief executive officer of Northern Bitcoin, explained that the mine is a substantial part of running a green Bitcoin infrastructure.
“In Norway we found the right conditions to mine Bitcoin emissions-free, environmentally-friendly and, therefore, sustainable,” he said to CoinJournal. “This is very vital for us, as we are convinced that the future of Bitcoin is green.”
Schultz, a former banker, left his career in traditional finance to pursue Bitcoin. comparing cryptocurrencies to the stock market, he told me a story regarding how a colleague wanted to grasp how they could purchase stocks at an exchange. After telling him how, the colleague came back a few days later, aggravated that he had to go through plenty of paperwork and then wait a minimum of two weeks to get his trading account.
“Being used to trading Bitcoins and other cryptocurrencies on his mobile phone and within seconds without any intermediaries, he was deeply irritated about this insight and replied: ‘Trading stocks feels like playing Counter-Strike offline.’ For me, this statement is further proof that our financial system is going to need to change enormously.”
Turning Bitcoin’s Energy Consumption on Its Head
Out of all the Nordic countries, Norway produces 97 per cent of its renewable energy through hydroelectric power. This is compared to Sweden, which creates 46 per cent, while Finland is pegged at 17 per cent.
With access to low cost, renewable energy, as well as operating in a country that has political and legal stability, Northern Bitcoin has chosen a prime location. Not only that, but the country has up to 6.7 terawatt hours (TWh) of excess renewable energy available. This puts electricity costs around €0.032 to €0.044/kWh, with a power usage potency ratio of 1.08.
One of the best debates around Bitcoin is the amount of energy it consumers to mine it. In January, the Guardian published an article with a somewhat sensationalised headline. Taking estimates from Digiconomist, it puts its energy consumption ahead of New Zealand and Hungary.
Yet, while it’s vital to consider the energy that's being used for Bitcoin mining, topics on it are usually one-sided. And it's these that are taken as reality when discussions surround climate change.
Speaking on the matter of Bitcoin’s energy use, Moritz Jäger, CTO of Northern Bitcoin, said that processing gold consumes 100 times the amount of energy than Bitcoin. Of course, while gold could also be seen as having more value to a person, what concerning the energy used with payment processors?
In 2017, Bitcoin mining was pegged at consuming 30 TWh of energy; however, banking consumed a far greater amount, 100, as pointed out in a recent article penned by Katrina Kelly-Pitou, who studies clean energy technology at the University of Pittsburgh.
“It’s an ongoing method and it's slow and it's a serious issue, which can hurt Bitcoin if the source of energy we are using comes from the wrong places,” stated Schultz. “As we’ve seen in China they believe coal power plants and [are] using this valuable energy to produce transaction services to the Bitcoin network. Is this a decent idea? undoubtedly not.”
Stepping into the Mine
Before getting into the mine, a select group of journalists were met by Mats Andersson, the chief marketing officer of Lefdal Mine data center. After issuing security passes to us, we were driven down the spiral driveway deep into the mine, stopping at level two.
There are three levels presently operating, that store containers for the IT equipment. In total, though, there are six subterranean levels with an area of 120,000m2 that can hold up to 1,500 container units.
Entering the widespread system of underground halls, streets, and chambers, averaging 100m deep in the mountain, one is instantly aware of the temperature. At a constant 9C, it becomes obvious that this mine is the ideal location for housing mining hardware. It’s also apparent that warm clothing is best suited for this excursion.
Located next to a 565m-deep Norwegian fjord and connected to four neighbouring glaciers, Northern Bitcoin uses hydroelectricity powered by 100 per cent renewable energy to run its mining operation. Taking the 8C water from the nearby fjord – obtainable all year without limit – it cools the hardware from 30C to 18C. This drastically reduces the energy needs for operating the hardware, reducing operating costs by up to 40 per cent compared to similar data centres.
The mine also boasts the highest security and is one of the safest data halls in the world. This is down to the fact that the huge overlying rock of the mountain is a natural protect against electromagnetic radiation.
In one avenue we are shown, Northern Bitcoin’s containers are stacked three high, every of which hold 210 ASICs. Additionally to the mine’s naturally cool climate, the pipes have water pumped into them to cool the hardware down further. Averaging 8C once the water enters the pipes, it reenters the fjord at a pleasant 26C. This puts its water usage potency at the ideal value of zero as no water is consumed throughout the process. Not only is it sustainable, it’s also profitable.
When asked by a German reporter how low the price of Bitcoin would need to go before the company is affected, Schultz simply said: “very low.”
“The value of Bitcoin is a issue that affects our business,” he added to CoinJournal. “However, we act and operate in the long-run and the same applies to how we glance at the price of Bitcoin. Besides, from a business perspective, a moderate Bitcoin price could facilitate operational activities.”
Scaling the company
Having only been running its mining pool in Norway since the end of June, Northern Bitcoin has entered the next part of its growth.
Until now, the company was itself part of a mining pool; however, since its mining capacity has grown it's created its own. The pool is set to open to external miners at the end of August, who are able to participate in Northern Bitcoin’s mining pool in a number of ways such as contributing computing power – alleged hashrate – or their own hardware when it exceeds a certain size.
“As one of the very few mining pools worldwide, we support so-called “ASIC-Boost,” explained Jäger to CoinJournal. “Besides, we will promote miners who perform green sustainable mining. In addition, we will expand our own mining activities. Everything we focus on is to build a green Bitcoin to secure its future prosperity.”
EmoticonEmoticon