I have no idea if Bitcoin or other cryptocurrencies are wise investments. I do know that the energy required to maintain new digital currencies is substantial. From a power consumption standpoint, is Bitcoin a sustainable currency? Could the hydronics community help these currencies stay relevant? 

My novice understanding of the Bitcoin process is that you can buy, sell and/or find these units of currency. Buying and selling is pretty straightforward. You can buy Bitcoins and exchange them with people who accept them, just like an online credit card transaction. The way you find these digital tokens of currency is through a process called mining.

To become a Bitcoin miner, you need to buy a specific type of server computer. The hardware runs particular software that may have to try billions of combinations to match and verify groups of buy/sell transactions that are occurring. By mining, you can find Bitcoins. The Bitcoin is essentially a reward for verifying transactions within the community. To me, this seems very similar to a bank keeping track of trades and earning a percentage of the money exchanged as a fee.

According to a Forbes article, Bitcoin required 29 times more energy than all of the Tesla cars on the road combined in 2017. As Bitcoin grows in popularity, the number of computers required to crunch the transactions is growing. In the early days of Bitcoin, you could mine using a consumer-grade computer in your basement. Now, the community needs an enormous amount of data centers and the associated electrical power draw.

Bitcoin mining is growing in North America. An Earther.com article states: “In past years, Chinese companies had more or less cornered the cryptocurrency mining market. Taking advantage of cheap power — sometimes as little as 2 cents per kWh, while the U.S. industrial average was 6.6 cents as of 2017 —these mining operations operate at a scale and cost margin that has been difficult to challenge, resulting in Chinese miners accounting for two thirds of the Bitcoin network’s processing power.”

The Chinese government isn’t that excited about Bitcoin farming anymore and is encouraging their citizens to slow down with the servers. This is forcing the members of the Bitcoin mining community to look elsewhere for cheap electricity. North American communities with inexpensive kWh rates, generally near hydroelectric dams, are a good fit.

The eastern Washington State communities near the Columbia River are seeing a jump in new neighbors. The new faces in town aren’t looking to start apple farms, as has been the long-standing tradition in the area. They are looking to build mega-server buildings. Politico.com writes: “The commercial miners now pouring into the valley are building sites with tens of thousands of servers and electrical loads of as much as 30 megawatts, or enough to power a neighborhood of 13,000 homes.”

As more people buy and sell things with Bitcoin, the complexity of mining the transactions increases. If the value of a Bitcoin doesn’t consistently increase, it won’t make sense to build a mega warehouse of servers in order to justify the cost of mining. As of December 11, 2017, you would have been crazy not to start building a mountain of servers, because the price per Bitcoin almost broke $20,000 USD. As of the end of March, the price per Bitcoin was about $7,000 USD. While $7,000 per unit is still an awesome investment, if you bought a Bitcoin for below a dollar in 2011, it could be hard to support the volume of transactions going forward.

How does this actually pencil out? This January 2018 Forbes article states:

“Just a few years into the cryptocurrency revolution, Bitcoin mining is already eating up an estimated 20,000 gigawatt hours of electricity per year. That’s roughly 0.1 percent of global generation, on par with the power demand of Ireland. The primary culprits are Bitcoin mining appliances like the Antminer S9, which is a computer processor that does nothing but endlessly crunch algorithms to lengthen the blockchain. An Antminer draws a load of 1.5 kilowatts — enough to power two refrigerators and a flat screen TV. If you run an Antminer 24/7 for a year, it will produce about 0.85 Bitcoins, at a cost of about 15,000 kilowatt-hours. Depending on your power prices, it will cost anywhere from $600 (at 3 cents per kWh) to $1,800 (at 9 cents per Kwh) to mine one coin.”

I found a bunch of online calculators that let you run the numbers to see if mining is a good investment. You enter the cost of the computer you buy, processor power, energy consumption and other factors. With the Antminer S7, at ~$7,000 USD per Bitcoin value, you would only be profitable if your price per kWh power stays under $0.07. It would take you about two years to make your money back, if the price of Bitcoin stays stable. If the price per Bitcoin drops, or your electrical rates rise, it would cost you money to mine. Similar to mining a mineral in the ground, I guess.

As is common in the tech industry, someone may develop a better software program that manages the transactions more efficiently. Faster computer processors would help, too. Lower energy consumption servers or inexpensive kWh power is another option. Energy efficient cooling could be another way to make Bitcoin mining more cost-effective.

As seasoned heating and cooling experts may imagine, some of these server farms aren’t the pinnacles of cooling technology. In many cases, cobbling together a bunch of residential PTAC systems is the current method of choice. If computers run too hot, they aren’t as efficient as they could be. The wear and tear of components like cooling fans will also increase in poorly cooled spaces.

Could radiant cooling help lower the cost of mining a Bitcoin? Engineers who are serious about energy efficiency can’t deny the upside of covering a large share of the sensible cooling load with hydronics. The kWh burden of cooling a warehouse of servers would be lightened with an actively cooled floor or ceiling.

Some tech companies are putting the servers themselves directly into liquid. The MIT Technology Review has an article about an Intel project where they put the servers in tanks of mineral oil. By doing this, they claim, “[Intel] can cut power consumption from servers by 10 percent to 15 percent and from cooling equipment by about 90 percent, according to the company.”

Whether or not you invest in Bitcoin or any sort of digital currency mining, lots of other people will be building servers in the future to keep track of our ever-expanding digital dependent lifestyles. In some cases, traditional cooling techniques may lead to low profit margins. Specializing in data-center-specific cooling systems may be a nice niche for your company. While most data centers will go with a traditional air-based system, you could set yourself apart by utilizing liquids to keep computers cool. Without the help of a significant boost in energy efficiency, cryptocurrencies may be something mentioned in history books in the same vein as other obsolete tokens of money. 

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