The U.S. Energy Information Administration (EIA) estimates that Bitcoin mining consumes about 170 TWh of electricity per year, which is about 0.6% to 2.3% of annual U.S. electricity consumption. According to an April report by JPMorgan Chase, the market capitalization of the 14 publicly traded U.S. companies totals approximately $20 billion.

As the bitcoin mining industry has grown, so has its reputation. And that reputation is mostly negative. Discussions with three different bitcoin mining executives shed further light on their operations and the reality of bitcoin mining.

Chronos Energy

Chronos Energy is an off-grid bitcoin mining company that utilizes unused energy. In other words, they convert energy that would otherwise be wasted into usable, economical energy through bitcoin mining.

In describing the company's operations, Chronos Energy CEO James McCarthy said, “We go looking for stranded energy, usually in oil fields. We work with oil and gas operators that have stranded gas assets that are not accessible to the market.”

What's interesting and unique about Chronos Energy's business model is that they don't rely on the grid. Instead, they bring Bitcoin mining directly to the source of the unused energy.

“We bring in natural gas generation and remanufacture it in-house. We deploy bitcoin mining operations to consume that energy, reduce carbon emissions, and mine bitcoins” McCarthy added.

Such an operation can only be good for the environment. Instead of wasting energy and creating unnecessary waste, oil and gas field operators can now reduce emissions by converting lost energy assets into clean power.

But what about the impact on local communities?

“It's a huge benefit to local communities,” says McCarthy. “In the oil patch, local communities are often plagued by these flares. Orange fires in the middle of the night can keep you awake. Depending on the size of the torches, they can be very loud. And there's an odor - unburned methane being released into the air - that can seriously disrupt communities.”

If bitcoin miners like Chronos Energy were able to use methane, then this problem would no longer exist. Methane is converted into electricity instead of being released into the atmosphere.

It's also worth noting that methane has more than 28 times the ability to absorb heat in the atmosphere than carbon dioxide, according to the U.S. Environmental Protection Agency (EPA).

Pantheon Mining

Pantheon Mining is a mining-as-a-service company that works with “best-in-class technology, product and investment partners”.

Describing its niche approach to Bitcoin mining, Pantheon CEO Lodewyck Berghuijs said, “We primarily work with high net worth individuals. We create small customized farms, like 1MW. everything is private, and we put a lot of emphasis on the confidentiality of the location, which adds to the decentralization of the network. You can compare it to small doomsday vaults; if anything happens in the world, there will always be nodes running.”

This is an interesting contrast to the claim that “too large of a Bitcoin miner could lead to insufficient decentralization of the Bitcoin network.” The size of the mining company becomes irrelevant if many small mines operate in the shadows. There will always be hashing power from smaller players that no one even knows about.

Why is it so important to support the Bitcoin network in this way? “Bitcoin mining is the basis for a new decentralized store of value that is incorruptible and no government can destroy it,” Berghuijs explains.

Many people agree with this, which is one of the reasons we wanted to write this article and get an insider's view from the people who run these machines.

When it comes to mining coverage, most of what is often repeated in the mainstream media involves the amount of energy that bitcoin miners allegedly use. One would think that consuming so much energy must be a bad thing, because it is. But is there more to the story?

Berghuijs makes a good point that in some cases, energy demand can be helpful, saying, “For example, to get power to the more remote parts of Africa, you need a large energy buyer. Otherwise, why would they build something that leads to a loss? That's where Bitcoin miners can make a huge difference; you have a constant demander of electricity and an incentive to create quality infrastructure.”

Phoenix Group

Headquartered in the United Arab Emirates, the Phoenix Group consists of 29 unique companies operating in five different verticals. Rather than being a company that operates several bitcoin mining farms, Phoenix Group provides services such as mining and hosting, cloud mining, and retailing of cold wallets and mining equipment.

Seyed Mohammad Alizadehfard (Bijan), CEO of Phoenix Group, said, “Phoenix Group operates nine mining facilities in the U.S., Canada, CIS, and the UAE, utilizing advanced technologies and innovative approaches to maximize efficiency and minimize environmental impact. Our mining and hosting services, cloud mining options, and retail distribution of mining hardware and cold wallets further enhance our comprehensive offering in the cryptocurrency space.”

He also mentioned that the business involves “regulated crypto investment platforms like Exchange M2,” which the company's website describes as “an Abu Dhabi-based regulated crypto investment platform developed by industry-leading experts.”

Returning to mining, when asked about its impact on local communities, Bijan noted that the company's “mining facilities create jobs and contribute to the local economy. We also participate in community development programs and support education and technological advancements to create a positive and inclusive environment.”

Commenting on the impact of mining on the power grid, Bijan said, “By optimizing our energy use and utilizing renewable energy sources, we contribute to the stability and sustainability of the power grid.”

The Truth About Bitcoin Mining Revealed

When asked about the most common misconceptions about bitcoin mining, all three responded with answers involving claims that bitcoin damages the environment. All three executives cited their operations and the environmental benefits of mining operators in general.

“People see Bitcoin as an energy consumer, which is a misconception. It's not a consumer of large-scale energy because it's an economic arbitrage,” McCarthy said. “Miners won't start mining bitcoin where it's not economical for them. There needs to be an incentive there. Often, that incentive is excess energy. The fact is, to have reliable energy, you have to have a reliable, good consumer of energy. No one is going to produce energy for unstable demand. You have to have a steady demand to have a steady supply. So that's why Bitcoin mining is actually good for the whole energy industry.”

Bijan said, “We are firmly committed to reducing our environmental impact. We operate with energy-efficient technologies and actively seek renewable energy sources to power our mining facilities.”

Berghuijs took a similar stance, stating, “Bitcoin is the most ESG-compliant investment in the world right now. The energy we use is 100% from sustainable sources: hydroelectric, nuclear and solar.”

The three mining companies represent different business models and operate in different geographic jurisdictions. They all bring benefits to local economies, communities and ecosystems.

Let this article be an example to those who decry the fact that Bitcoin mining has no net benefit to society.