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 1. News


ONE OF RUSSIA’S LARGEST OIL PRODUCERS CREATES A BITCOIN MINING FARM IN SIBERIA

By Luke Dormehl December 31, 2020
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Hut...Hut... Crypto!


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.


DETAILS OF THE NEW BITCOIN MINING FARM

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.

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