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Speaking at the Texas Blockchain Summit, US Senator Ted Cruz suggested solutions to tackle Bitcoin mining dilemmas. He argued that Bitcoin miners could exploit Texas state’s abundant energy resources — one of which is monetizing energy created through oil and gas extraction.
Mining Bitcoin with Gas Flare Energy
Ted Cruz, the US Senator from Texas, has suggested miners use the natural gas flared—the controlled burn of natural gas at the wellhead—to mine Bitcoin. Cruz said that this is a form of energy that is largely wasted, asking Bitcoin miners to take full advantage of this opportunity:
“50% of the natural gas in this country that is flared, is being flared in the Permian right now in West Texas. I think that is an enormous opportunity for Bitcoin, because that’s energy that is just being wasted. It’s being wasted because there is no transmission equipment to get that natural gas where it could be used the way natural gas would ordinarily be employed.”
Bitcoin mining has always been a controversial topic, with environmentalists and detractors using it as a weapon to criticize Bitcoin. However, Cruz believes by capturing otherwise wasted natural gas, miners can alleviate concerns around Bitcoin while benefiting Texas in the process. “The perspective I’m suggesting is very much the reverse, which is as a way to strengthen our energy infrastructure,” he said.
Cruz addressed Bitcoin miners:
“Use that power [the natural gas flared] to mine Bitcoin. Part of the beauty of that is the instant you’re doing it you’re helping the environment enormously because rather than flaring the natural gas you’re putting it to productive use.”
Texas’ electric grid operator lost control of the power supply during the last winter storm, resulting in severe power outages in the state. However, Cruz said that Bitcoin mining can be mobilized reflexively in response to fluctuating energy supplies, thus helping the state in the event of a sudden power outage. “In five years, I expect to see a dramatically different terrain, with Bitcoin mining playing a significant role in strengthening and hardening the resilience of the grid,” he said.
Sen. Cruze “Is Absolutely Right”
While Cruze’s recent remarks may seem too good to be true, they are ostensibly quite precise. Nic Carter, co-founder at blockchain data aggregator Coinmetrics.io and a partner at Castle Island Ventures, claims Cruze “has the most enlightened perspective on the issue.” Nic said:
“I was surprised because I had spent months interviewing miners and energy experts for my talk and those were the exact points I settled on… You can imagine my shock when Sen Cruz demonstrated expertise around demand response, a pretty esoteric concept.”
Suffice to say, Sen. Cruz is absolutely right. Bitcoin miners are actively engaged in demand response (and a more sophisticated version called 'controllable load'). Major energy firms will use BTC for renewable offtake. & flare gas mitigation is happening.
— nic carter (@nic__carter) October 10, 2021
Nevertheless, it is worth noting that using gas flare energy is not the only recent attempt to innovate how Bitcoin is mined. In late September, reports revealed that some US Bitcoin miners aim to use “micro” nuclear reactors to power energy-heavy BTC mining, exploiting the large amount of excess nuclear power that would otherwise go wasted while also saving struggling nuclear plants from going out of business
Furthermore, El Salvador, which has adopted Bitcoin as legal tender, mines BTC using energy from volcanos. Just last week, President Nayib Bukele tweeted that the country has mined its first Bitcoin with power harnessed from a volcano.
Biden Plans Executive Order to Clamp Down on Crypto
A recent report by Bloomberg claims the Biden White House is preparing an executive order aimed at the crypto sector. The report, citing people familiar with the matter, claims the order would require federal agencies to investigate crypto and offer recommendations. Bloomberg reported:
“The proposed directive would charge federal agencies to study and offer recommendations on relevant areas of crypto — touching on financial regulation, economic innovation and national security, said the people, who asked not to be named discussing plans that are still under consideration.”
The report noted that a draft of the order is already circulating among numerous agencies but it remains unclear if the White House will proceed with it. The White House can drop the order and take more informal steps to reach the same goal, the report claims.
Coincidentally, rumors of the new report come at a time when various departments of the US government are zeroing in on crypto. Among such agencies, the Securities and Exchange Commission (SEC), chaired by Gary Gensler, has paid unprecedented attention to the crypto sector. The regulatory body is known for its attempts to regulate the crypto industry.
Do you think Bitcoin miners would exploit this opportunity and rush to mine Bitcoin using gas flare energy? Let us know in the comments below.