Bitcoin Mining with Hydro Energy

A Brief History of Hydroelectric Energy

We take mass food production for granted in the modern Western world: supermarkets are rarely empty. But our ancient ancestors had to solve this problem to evolve from hunter-gatherer societies to urban civilization. For example, the ancient Greeks used water wheels to grind wheat into flour, drastically increasing food production. Even earlier, Egyptians utilized water screws for irrigation. These were some of the earliest applications of hydropower, paving the way for humanity to transition from a nomadic existence to a more settled and civilized life.

Hydro energy is any energy derived from the movement of water, while hydroelectric energy specifically refers to hydro energy used to generate electricity.

Hydroelectric energy emerged in the 1880s when a water turbine powered a dynamo, which in turn illuminated buildings in Michigan. Today, hydropower is once again poised to transform our existence, this time propelling us from a monetary dark age to an era of monetary enlightenment.

I’m speaking, of course, about Bitcoin.

How Hydroelectric Energy is Generated

Hydroelectric energy is harnessed through various methods, including dams and tidal barrages:

• Dams: These structures channel the rushing waters of rivers into turbines, whose rotation generates electricity.
• Tidal Barrages: Similar to dams but often underwater, these utilize ocean tides to drive turbines.

Green energy sources, including hydro energy, face storage challenges. Typically, hydro energy is stored in reservoirs at high altitudes, maximizing gravitational potential energy. However, capturing all available energy is not always feasible—especially during particularly rainy seasons when dams may exceed their capacity.

This mismatch between supply and demand often renders green energy capture less profitable.

That’s where Bitcoin mining saves the day.

Bitcoin Mining Saves an Old Plant

In July 2021, Bitcoin.com reported the revitalization of a 123-year-old hydroelectric plant in Mechanicville, New York, thanks to Bitcoin mining. As one of the oldest renewable energy plants still in existence, its demolition would have been a great loss.

Albany Engineering Corp (AEC), which now owns the plant, discovered that mining Bitcoin was three times more profitable than selling electricity to the National Grid. Jim Besha, AEC’s CEO, recognized the mutually beneficial relationship between Bitcoin mining and renewable energy, stating:

“It’s the best [type of Bitcoin mining] because we’re using renewable energy. We’re just doing it on the side, experimenting with it.”

Initially, maintaining profitability at the plant was a challenge for AEC. But Bitcoin mining turned the operation from loss-making to profitable, ensuring the plant’s continued operation.

The Future of Hydroelectric Energy and Bitcoin Mining

Hydroelectric energy is well-positioned to play a growing role in Bitcoin mining. Mining rigs operate most efficiently when they run continuously in cool conditions, and hydropower provides an ideal environment. Furthermore, Bitcoin mining can act as a buffer for hydroelectric plants, ensuring profitability during times of energy surplus, such as during heavy rain or snow seasons.

To naysayers who view Bitcoin mining as a waste of electricity, I ask: do you want renewable energy sources to survive or not?

Entrepreneurs are already capitalizing on this synergy. For example, our Arctic Circle facility in Norway harnesses hydropower to mine Bitcoin while recycling heat to warm a local building, replacing its old oil boiler and demonstrating sustainable innovation in action.

In another example, DMG Blockchain Solutions and Argo Blockchain have launched the first-ever Bitcoin mining pool fueled entirely by clean energy—specifically hydroelectric power. Dan Reitzik, CEO of DMG, remarked:

“We believe this is an opportunity for continued growth as we develop a better understanding of climate-friendly operations while simultaneously integrating the newest and most innovative blockchain technologies.”

Peter Wall, CEO of Argo Blockchain, added:

“The first ‘green’ mining pool is an important step towards protecting our planet today and for generations to come.”

As Bitcoin miners continue to seek the most cost-effective energy sources, demand for hydro energy is likely to spur innovation in hydropower technology. If we’re fortunate, renewable hydropower could one day become as ubiquitous as fossil fuels are today.

And we’ll have Bitcoin to thank.

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