- [Narrator] This Bitcoin mining facility
in upstate New York,
home to thousands of computers running nearly 24/7
is just five miles from Niagara Falls,
near one of the largest sources of hydro electricity
in the US.
At the facility, workers are attempting to build
a more sustainable way to mine for Bitcoin,
a process that has generated a lot of criticism
for the amount of energy it consumes.
Recent data estimates that globally
it consumes over a hundred terawatt hours
of electricity annually,
or more than the country of Finland.
In 2018, one study estimated
that in less than 30 years,
emissions from Bitcoin mining alone
could push up global warming above two degrees Celsius
and recent crackdowns on cryptocurrencies in China
are putting an even bigger spotlight
on the environmental impact of the industry.
- You have this Bitcoin mining sector that is very hungry
for innovation and technological solutions.
- Bitcoin miners around the world are making changes
that they say will make the process more sustainable,
both environmentally and financially.
Here's a look at how this transformation is playing out.
The facility in Niagara Falls
is owned by Bit Digital and BlockFusion,
two crypto mining companies
that are harnessing the power of water
to cut down on their operations emissions.
- This place was founded as a coal factory
to power a tire company.
And this was decommissioned and repurposed
into a Bitcoin mining facility, not using fossil fuels,
but instead using Niagara Falls
and using that clean source of power to power this facility.
- Sam Tabar helps run Bit Digital,
a member of the Crypto Climate Accord,
which aims to transition the crypto industry
to net zero greenhouse gas emissions by 2040.
- We intend to be a hundred percent renewable
way before then.
We're about half renewables now,
and in the next few months,
we'll be dramatically increasing that percentage.
- According to Tabar,
this facility which runs largely on renewable hydro-power
is almost entirely carbon neutral.
The process starts here
at the Robert Moses Niagara Power Plant,
where water from the Niagara River run through 13 turbines
to produce renewable electricity.
This is then transported
through high voltage transmission lines
to Bit Digital's facility,
where it powers a warehouse of mining machines.
The computers use Bitcoin's proof of work method,
which burns huge amounts of energy.
This process is part of how the cryptocurrency
builds its blockchain,
which is key to keeping it decentralized and secure.
Around the world powerful computers work simultaneously
to guess a complex sequence of numbers
to validate a block of transactions.
The miner whose computer gets there first,
is awarded Bitcoin.
This transaction is recorded on the blockchain ledger,
which is essentially a digital record book.
While secure,
proof of work needs large amounts of processing power
simply because it requires all of the mining computers
to work on the same puzzle.
- These math problems are very complicated
and they'll only increase in difficulty
as more and more miners come into the system.
So there's no debate that it takes a lot of electricity.
The debate is where that source of electricity comes from.
- The process to unlock new Bitcoins also has limits.
Right now,
over 18 and a half million Bitcoins have been mined
out of a maximum 21 million.
And the more miners that seek out those remaining coins,
the more energy intensive the process becomes.
This is what is driving concern over electricity consumption
in the crypto industry.
- It is true that it is energy intensive.
However, it's all about the sources of energy.
If you use clean sources of energy, it's not a problem.
If you're using dirty sources, that's a problem.
- While renewable sources of energy
release less CO2 into the atmosphere than fossil fuels,
experts say that hydropower facilities
can still have harmful impacts
on ecosystems and biodiversity.
Bitcoin mining, both renewable and non-renewable,
also generates electronic waste
an estimated 11.5 kilotons per year.
Bit Digital also runs a number of other operations
that use renewables,
such as this solar powered mining site in Nebraska.
Other Bitcoin miners in the US are eyeing nuclear power
and countries like Iceland are home to operations
using geothermal energy.
Tabar says,
that along with his company's transition to renewables,
Bit Digital is ramping up operations in North America,
partly a reaction
to their recent regulatory crackdowns in China.
For years, the company, like many other crypto miners,
ran part of its business out of China.
But just months ago,
the country effectively banned Bitcoin mining,
which has driven many in the industry
to rapidly move operations to other countries
like the US, Canada and Kazakhstan.
- It's been a great thing for the United States
because all this innovation in the power sector
is happening as a result of this ban.
The focus on finding renewable sources of power
and creating technological solutions
to create further efficiencies.
- For Tabard,
transitioning the crypto industry to renewable energy,
isn't just for the good of the environment.
It also has financial benefits.
- I don't think investors
are keen to invest in Bitcoin mining companies
that are not looking at cleaner sources of power.
That is not the right investment to make.
We want to be profitable,
but we don't want to destroy the earth while we're at it.
- While critics remain skeptical
of the crypto industries' energy demands,
the push for a more sustainable mining future
continues to pick up steam.