This is an opinion editorial by Dan Luddy, a mechanical engineer and energy consultant with 15 years of experience designing high-performance buildings.
The energy we use to heat our buildings is one of the main contributors to global greenhouse gas emissions and is a focus of decarbonisation initiatives. By reusing waste heat, Bitcoin mining could be profitably integrated into commercial and residential buildings and be a catalyst for electrification retrofits that would improve building performance and reduce global carbon emissions.
Reduction of emissions from buildings
A significant portion of buildings’ energy use is in the form of heat, most of which comes from the burning of natural gas.
As a replacement for gas, electrical resistance heating is a simple technology and eliminates emissions on site. But it is 3 to 5 times more expensive than gas at average utility rates and is as clean as the power plant that generates the electricity.
A more efficient solution is heat pumps, which absorb and compress heat from outside air, water or a geothermal well. Heat pumps are a much more efficient option, so operating costs are comparable to gas. However, most heat pumps need electrical backup in very cold temperatures (
Removing greenhouse gas emissions from the built environment hits a cost impediment: new equipment, new infrastructure, and minimal return on operating cost savings. This financial challenge is where bitcoin mining could change the equation by providing heat as a by-product.
Electrifying with Bitcoin mining
Almost all of the power consumed by a mining ASIC is converted to heat, which must be removed from the machine. Air-cooled ASICs have fans that exhaust heat. This can be used to heat the surrounding air, but is difficult to compress, transport, or store for other uses.
Liquid (water or liquid dielectric) cooled ASICs present a better opportunity for integration with building systems. By connecting liquid-cooled ASICs to hot water systems with pipes, a pump, and a heat exchanger, the mining operation provides a source of hot water that can be used in a building. Additionally, ASICs can run 80% faster and 5% more efficiently than air-cooled computers.
The hot water generated by Bitcoin mining can be used for a number of uses within different types of buildings, including space heating, domestic hot water, swimming pool heating, and industrial uses. There are many buildings that have high electrical service and hot water demands throughout the year, including hotels, multi-family homes, laboratories, university buildings, manufacturing facilities, and more.
When used to replace gas heating, reused waste heat can offset ~33% of mining costs. Since water-cooled equipment runs more efficiently, miners can run profitably even at retail electric rates by running faster and selling excess heat. Additionally, the building eliminates on-site fossil fuel emissions associated with heating.
Waste heat reuse is a financial argument for integrating bitcoin mining into building systems, but it would be more attractive if integration of on-site solar photovoltaic (PV) production was considered. Photovoltaic panels on roofs or integrated into parking canopies have come down significantly in price over the last decade, leading to higher levels of adoption. Depending on the utility provider and connection, power generated by PV panels in excess of building demand can be sold back to the grid via net metering, stored on-site, or in the worst case, wasted.
An on-site Bitcoin mining system presents another option for utilizing excess solar PV production. Depending on the difficulty setting and net utility metering agreement, using excess energy to mine bitcoins may be more profitable than selling it back to the network. This additional revenue option incentivizes building owners to maximize on-site photovoltaic panels, generating additional capacity and reducing reliance on electricity generated from fossil fuels.
Many utilities are offering demand response programs to curb excess demand during periods when the grid reaches full capacity, such as during a heat wave. In many of these programs, building owners can receive incentives or payments from the utility to modify their operations during peak conditions to shed a certain percentage of load and stabilize the grid when needed.
A building modified to operate with a bitcoin mining system can respond favorably within these programs. Mining rigs can be shut down almost instantly and demonstrate a significant reduction in peak demand, helping shift electrical resources to more essential life and safety resources. Participation in these programs can generate additional income, essentially providing payments to the building for No mine at specific times.
One of the fascinating features of bitcoin mining is scalability. Depending on the price of electricity, the potential to reuse heat, and access to infrastructure, individual ASICs can operate cost-competitively compared to large-scale miners with massive data centers. Commercial and multi-family buildings provide a mining operation size in the middle of that range. There are thousands of buildings around the world where mining could be successfully integrated, expanding the bitcoin network and further distributing hashing power.
Potentially, there could be a day when bitcoin miners not only secure the network, but also provide hot water for affordable housing units, heat schools and offices, and absorb excess solar energy from rooftops.
Future scenario: low-carbon housing with Bitcoin mining
Consider an apartment complex that has chosen to install a liquid-cooled unit in the basement of a room that used to house a gas furnace. The modernization of the electrical system and the mining equipment have been financed and installed by a mining operator who will share the income with the owner of the building.
The mineral heat provides hot water for showers, sinks, dishwashers and washing machines. In winter, the miners work overtime to heat the apartments. During peak summer days, a newly installed rooftop photovoltaic system returns excess energy to the miners to keep them running at low cost. The building participates in local network demand response programs and shuts down mining as needed to respond to peak conditions and earn additional revenue.
As a result, the owner has additional capital that can be reinvested in the building to improve maintenance, increase property value, and improve the experience of building tenants, all while reducing carbon emissions. This same approach could be scaled and implemented across commercial and residential wallets, presenting a triple win for bitcoin, buildings, and the environment.
This is a guest post by Dan Luddy. The opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.