
Ohmm Mining: Turn Flared Natural Gas into Bitcoin - seibelj
https://upstreamdata.ca/
======
michaelt
A few years ago, I wondered if my electrically-heated office could instead be
heated with bitcoin mining hardware. It would effectively be free electricity,
right?

What I found out from sources like [1] was, because the bitcoin mining
difficulty is constantly increasing, the BTC a bitcoin miner produces reduces
exponentially. So even with free electricity, a miner that makes BTC worth a
total of $361 in 24 months, will only make $10 more if run for 99 months.

And if you only need to heat your office 25% of the year? Well, the mining
difficulty will keep on rising even when your hardware is turned off, so it'll
be obsolete after 24 months anyway. But it'll only have produced 25% the BTC
in its fixed useful life.

So if buying retail mining hardware is already questionably profitable† _even
with free electricity_ , buying it and only running it a fraction of the time
is even moreso.

This company must be getting a great price on mining hardware if it's
profitable to install and run it only a fraction of the time.

[1]
[https://calc.randomcrypto.org/?h=bitmain-s9j-14.5&hr=1450000...](https://calc.randomcrypto.org/?h=bitmain-s9j-14.5&hr=14500000000000&hc=625&hp=1350&er=8736.77&sd=19-05-30&d=36)

† Which seemed to be the case when I researched this, although bitcoin prices
can vary a lot of course.

~~~
EthanHeilman
At some point Bitcoin mining difficulty either:

1\. must hit a ceiling and the rate of increase will significantly slow,

2\. or Bitcoin mining will break SHA-256 and render it insecure.

I find 1 to be a the most likely outcome however the most plausible path for 2
would be a novel cryptanalytic attack on SHA-256 which could be exploited to
increase mining power. It seems very unlikely that 2 would occur because
mining power approaches the brute force limits of SHA-256.

~~~
sunsu
No. There is no way for Bitcoin mining to "break SHA-256 and render it
insecure". There isn't enough energy in the whole SUN to do that.

~~~
EthanHeilman
Well Bitcoin mining could "break SHA-256 and render it insecure" by:

1\. exploiting cryptanalytic weaknesses in SHA-256,

2\. successes in new computing paradigms such as a large scale quantum
computer using Grover's algorithm.

3\. or turning the local galactic cluster into computronium for SHA-256
miners. Although at that point we have bigger problems. =)

If you think SHA-256 will not be broken anytime soon then that suggests that
you believe that mining difficulty increases will slow down.

------
throwaway5752
Or burn it, pretty much the same. Anything furthering bitcoin going to result
in much more electricity use, so flaring might be preferable environmentally.

Microgenerators or fuel cells (both complicated by source stream being
unscrubbed) would be better. If grid tie is the issue, would be more
interesting and productive to advance trapped energy source storage methods,
either thermal/kinetic, hydrogen separation (of source stream or splitting
local water), or other chemical.

One thing is that you don't generally have a bunch of completely isolated
wells - usually clustered smaller platforms or a giant one with tie-backs..
point being they share infra, though, so you can probably have a bunch of
wells in the same field sharing some energy storage infrastructure. What the
_net_ energy saves would be is a great question.

~~~
throwaway5752
Too late to edit, but "Microgenerators" should have been "microturbines"

------
pwagland
I like the idea of:

> conserv[ing] sources of wasted energy without the need for invasive
> infrastructure (pipelines, power lines, etc).

However, it isn't just a matter of dropping one of these skids onsite and
leaving, since these skids need to be connected to a power source, not a waste
gas source. So that waste gas _first_ needs to be converted to power, and then
that power routed into the skid.

This _is_ much easier than running lines out to the main grid to get rid of
that generated electricity. And a 750 kW generator probably isn't going to be
the main cost centre. Neither does bitcoin require particularly high bandwidth
by normal standards, but they are quite high for a remote location, and
doesn't seem to be mentioned in the blurbs.

It would also still be competing against cheap energy sources, since bitcoin
cost is essentially your input energy cost. And even if the gas that powers
the generator is "free", there are still a large number of costs with doing
anything remote…

~~~
comboy
For those wondering just like me, 750 KW generator yields $657K worth of
electricity during a year assuming 1kWh=0.1$

I'm guessing these rigs are at least $500K+ and you have to take into account
things breaking like they always do.

Btw, these rigs definitely don't look like they would be able to provide
appropriate cooling in a hot climate, but maybe that's not where they are
going to be used.

~~~
jdhn
Based on the .ca domain as well as the fact that they talk heavily about
Alberta, I'm betting that they're targeting the Canadian market. While Canada
can get warm in the summer, it's no Texas, and it's markedly colder during the
winter. I don't think that they're too worried about their equipment
overheating.

------
solarengineer
I wonder if protein folding might be a better use of such ideas and energy.

[https://en.m.wikipedia.org/wiki/Folding@home](https://en.m.wikipedia.org/wiki/Folding@home)

~~~
qqii
Grid Coin is built on that idea:

[https://gridcoin.us/](https://gridcoin.us/)

------
thinkcontext
Deeply skeptical of this but I'm curious about the practical aspects of
consuming the excess gas. What volume of gas is being expelled over what
period of time and how does that compare to the 750kw consumption of the rig?
Is there a storage vessel as part of the rig or at the drill pad to buffer gas
that would normally be flared? All of this affects what capacity factor can be
achieved which determines whether this can be made economic, ie the difference
between having to move the rig every few days vs letting it just sit in one
place for months on end sipping gas.

~~~
npongratz
> What volume of gas is being expelled over what period of time and how does
> that compare to the 750kw consumption of the rig?

I have no numbers, but the flares are apparently pretty easy to see from
space:

[https://geology.com/articles/oil-fields-from-
space/](https://geology.com/articles/oil-fields-from-space/)

And I've heard from first-hand reports that the amount of heat and light being
thrown off by flares is staggering. Like, feel-it-from-a-hundred-yards-away
hot. (Of course, I'm just some guy on the internet -- do your own research,
grain of salt, and all that).

------
guy_c
The founder was interviewed on this podcast -
[https://overcast.fm/+OBZna2NS8/5:16](https://overcast.fm/+OBZna2NS8/5:16)

To summarise points that are missed in the comments and maybe not well
describe on the website:

This is based in Canada. The vast majority is heavy oil in unconsolidated
sand. This cannot be pumped, so there are commonly no pipelines.

During the process of extraction a lot of low value methane escapes from the
oil. Canada has limits to the amount of venting a well can do, so if they
reaches the limit they have to either slow the well's production or spend
money on building a flare.

Both options have an economic cost. These mining units are addressing this.

------
ilaksh
How does it connect to the internet?

~~~
magnamerc
Starlink obviously.

~~~
Robotbeat
You laugh, but existing satellite internet like Viacom is probably doable.
$50-70/month with a 40GB/month soft cap should be good enough with a local
Stratum proxy. Latency is high, so you could lose a small amount due to stale
work units, but it’s not a big amount.

------
ryanmarsh
Others in the oil and gas industry are looking at this too. Natural gas is
cheap and plentiful, natural gas generators (that can burn Y grade) are
common. Vertically integrating around power seems the logical next step in
bitcoin mining. I'm waiting to see the first bitcoin mining company that
builds their own ASICs and drills their own wells.

~~~
Xplosiveoctopus
I'm sorry this is off-topic, but there's no other way for me to contact you.

I read your comment in one post about salaries: "Your comment really saddens
me. There’s so much more you could have. There’s no reason why what I make has
to be an outlier. I’m so so so not special. Many people have come on HN to say
exactly what I’ve said and have achieved outsized results. Jesus, is patio11
really that incredible of a guy? I mean, he’s really nice and pretty smart but
dude he made his start with a bingo card creator. Our mindset is our greatest
limitation."

I'd like to send you a letter. Could you please drop me an email at
xplosiveoctopus (at) gmail.com?

Thank you for your time, Ryanmarsh.

------
DonHopkins
If you invent a money printing machine, then why not just use it yourself
instead of trying to sell it to other people?

~~~
hjk05
Obviously because you can make more money selling it then keeping it to
yourself. If the purpose of the machine is to make money why chose the least
effective way of making that money just to prevent others from making money as
well?

Incidentally this is also the reason that people sell profitable companies
even though they are “printing money” every year.

~~~
DonHopkins
The point is that if you can make more money selling machines than printing
money, then it isn't a very good money printing machine, and you're just
another bitcoin scammer, refusing to eat your own dog food, selling an
impossible dream to suckers.

To purpose of simply using the machine yourself instead of selling it isn't
preventing others from making money, it's to avoid wasting your own time and
money on sales and marketing and customer service and hiring employees and
paying for their health care and leasing office space and manufacturing and
shipping products and giving refunds to unsatisfied customers, when you could
just be shoveling money directly into your bank account instead, without all
the overhead.

If the machine was really so great, then you could just print all the money
you needed, and give the machines away for free.

Now if you could invent a machine selling machine, then you'd have something.

------
henearkr
Well... they could have converted it in electricity, either directly on the
grid or by using a battery system (like the liquid batteries used to store
solar in Australia). Converting it into Bitcoin is hardly the best choice for
ourselves and our planet.

~~~
k_sze
I guess one reason it’s not already been done is because of physics. You can
capture the flared gas and convert it to electricity on site, but you still
need to be able to deliver it to the consumers for it to be valuable. But
electrical power is lost when you transport it over long distances due to wire
resistance, unless you convert it to really high voltage. Maybe all the
infrastructure required is just not worth the money.

Bitcoin doesn’t have this problem, all you need in order to make it liquidable
is an internet connection, which any gas/oil field probably already has.

~~~
J-dawg
Got to admire the creative thinking involved in this. Are there any more
"practical" potential uses? Some industrial process that requires lots of
power but not too much other infrastructure?

~~~
arethuza
CO2 sequestration?

~~~
TeMPOraL
Could a coin backed by stored CO₂ work?

~~~
arethuza
I promise to pay the bearer the sum of 1 ton of C02 on demand?

~~~
TeMPOraL
Well, Bitcoin doesn't work that way either. I was thinking more of a "you get
a coin for X tons of CO₂" \+ hype to make these work as currency, but I
suppose it's just a weird version of existing carbon trading solutions.

~~~
cwkoss
Kind of silly to make this a coin. Because you'll fundamentally need an
external system to audit CO2 sequestration and manage issuance, the auditor
might as well be a centralized issuer.

