Gazprom Neft, one of the largest oil producers in Russia, is getting into mining — for Bitcoin, that is.
According to a report from Coindesk, the oil drilling giant has opened a crypto mining farm that runs on gas energy. The crypto farm is located in the Khanty-Mansiysk region of northwestern Siberia. It is utilizing gas from a nearby oil field as an energy source, which is turned into electricity for the mining process using its own power plant.
While Gazprom Neft will not be doing the mining itself, it reportedly plans to open up its resources to miners and piloted a small-scale mining operation with the mining company Vekus this fall. Gazprom Neft aims to increase the size of the mining farm, although it has not revealed how large it plans for the farm to grow.
Bitcoin mining is the process of creating new Bitcoin. Mining has to be done using specialized computers, with miners solving a computational problem in order to chain together blocks of transactions (the so-called blockchain), for which they are rewarded with fresh Bitcoin. According to a BBC report, the energy consumption associated with mining Bitcoin is equivalent to seven gigawatts of energy, approximately 0.21% of the world’s energy supply, or the equivalent of the power consumption of Switzerland.
The Siberian Bitcoin farm solves two problems at once. The first is that it provides a new means of generating large amounts of almost free electricity for the energy-intensive process of mining cryptocurrency. The second problem it solves is that it helps deal with a byproduct of the oil drilling process, which can result in fines. The extraction of oil also results in the release of CO2. Instead of wasting this gas, using it to generate electricity is a valuable method of repurposing it.
In one month, 49,500 cubic meters of natural gas have reportedly been used to mine 1.8 Bitcoin. At current trading prices, that is equivalent to more than $52,000. That’s not a bad return on investment — especially now that it sounds like a lot of the necessary infrastructure has been set up.
- What is GPU mining?
- A complete, chronological history of the catastrophic GPU shortage
- Why the Bitcoin bust could finally bring down inflated GPU prices
- U.K. police expecting to bust pot farm stumble onto cryptocurrency mine instead
- NFTs have a climate problem, and the solution isn’t coming fast enough