The new Bitcoin mining facility in Texas was built in collaboration between Elon Musk’s Tesla, Adam Back’s Blockstream, and Jock Dorsey’s Block. Tesla has already delivered its four megapacks, giant battery setups, to the facility, which is meant to be an example of how one can mine cryptocurrencies via a sustainable process.
Since its initial announcement last month, the news of the facility setup has been slow. Everything we have seen thus far is a photo of the four tightly wrapped Megapacks with two wind turbines in the distance.
The arrival of these megapacks is the first real sign that the project exists for real, and it is moving ahead as planning. The megapacks, first noticed by Electrek, are an integral part of the facility’s goal of complete carbon neutrality. It also reminds us that turning crypto mining green is not something that would be cheap.
Most of the technology that will power the joint mining operation comes from Tesla. Much of the facility’s power will be collected by a Tesla-built 3.8-megawatt solar PV array, which will be stored in the Megapacks until it’s ready to be distributed.
Megapacks are one of Tesla’s lesser-known products since they are not yet suitable for widespread use. They have only been used for a few sustainability projects thus far. For example, the business sent 37 Megapack units to Alaska’s Kenai Peninsula to prevent dangerous power disruptions in the icy climate.
Megapacks are designed for large projects like this bitcoin facility, and they come at a premium. Currently, ordering four Megapack units, which would supply around 5.2MW of power, costs around 6 million USD, excluding taxes and thousands of dollars in annual maintenance.
Mining Bitcoin at Scale Made Possible?
For a long time, the issue of sustainability has been a major concern in the burgeoning cryptocurrency trend, but practical answers have yet to materialize.
Last year, Tesla’s position on cryptocurrencies shifted dramatically, with Musk abandoning his commitment to accept bitcoin as payment for Tesla cars due to environmental concerns.
“Tesla has halted vehicle purchases made with Bitcoin,” the company announced in May. “We are concerned about the growing use of fossil fuels at an accelerated pace for Bitcoin mining and transactions, particularly coal, which emits the most pollutants of any fuel.” Read More
If all goes according to plan, this joint operation could show that mining bitcoin at scale can be done without contributing significantly to the planet’s destruction. However, doing so will be prohibitively expensive, as it will require technology that the vast majority of the world lacks.
It is particularly true since Tesla has stated that it is now producing Megapacks at a little loss due to their high production costs. You can bet those margins aren’t improving anytime soon unless Tesla can develop a compelling rationale for the general public to trust these batteries again, which caught fire last year.
Overall, while the collaboration looks sustainable, it may not hold well in the long-term considering Bitcoin’s much larger issues.