Bitcoin miners seek alternative energy sources to cut costs
During the 2021 bull market, many large mining companies took on massive loans to buy equipment and the proper infrastructure required to mine cryptocurrency. Yet the collapse of crypto exchange FTX and Celsius left many of these companies filing for bankruptcy.
The current bear market, coupled with high Bitcoin network hash rates and low profits, has yet again left the crypto industry wondering if miners will be able to recover from losses. While this remains questionable, it’s become evident that mining companies today are focusing more on alternative energy resources to cut costs, ensure profits and, in some cases, reduce their environmental impact.
Steven Lubka, managing director for Bitcoin-focused financial services company Swan Bitcoin, told Cointelegraph that while the average rate to mine a single Bitcoin (BTC) is around $26,000, mining companies focused on renewable energy sources are seeing rates between $5,000 and $15,000 per BTC.
A spokesperson for Riot Blockchain, a United States-based publicly traded Bitcoin mining company, told Cointelegraph that wind and solar energy generated across Texas has helped Riot ensure some of the lowest costs to mine crypto. “As stated in our Q2 investor deck, it costs Riot $8,389 to mine 1 Bitcoin,” he said.
Kent Halliburton, president and chief operating officer of Sazmining — a hosted Bitcoin mining provider — told Cointelegraph that the biggest expense for mining has always been electricity:
Halliburton added that independently sourced data from the Bitcoin Mining Council shows that the Bitcoin network may indeed be one of the most sustainable industries. According to the source, 59% of mining operations are carbon-free and growing at a rate of nearly 4.5% per year.
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