Tesla announces that it is going to build solar and Megapack farms that will power a new Bitcoin mining facility with an energy storage system. It will be built in partnership with Blockstream and Jack Dorsey’s Blocks. Only last year, Tesla started accepting Bitcoin payments and had to halt. After which Musk stated that when Bitcoin mining becomes more sustainable, they will resume the Bitcoin payment system.
Tesla took a step back with crypto by removing the Bitcoin payment option. The company noted concerns over the energy needs of the Bitcoin network- “Tesla has suspended vehicle purchases using Bitcoin. We are concerned about the rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel.”
This is a concern that many Tesla community members shared when Tesla first announced its Bitcoin investment, and many were angered by the fact that the company didn’t think about it in the first place. At the time, Tesla noted that they were not selling their stake in Bitcoin, and that they planned to resume taking Bitcoin payments once the network shows a higher mix of renewable energy. Last summer, CEO Elon Musk said that he believes Tesla will resume taking Bitcoin payment as he sees improvements in the energy mix of Bitcoin mining. That has yet to happen, but Tesla is now directly involved in helping power Bitcoin mining with clean energy.
Blockchain technology
West Texas is a mecca of renewable energy in the United States. “You get this perfect overlap with both sun quality and wind speed in West Texas,” said Shaun Connell, executive vice president of power at Houston-based tech company Lancium. But a lot of that wind and solar power is concentrated in remote parts of the state. With no financial incentive, there’s little reason to build out renewable infrastructure to harness this energy Enter bitcoin miners. When these energy buyers co-locate with renewables, it creates a financial incentive for buildout and improves the core economics of renewable power production, which has been fraught with volatility. Miners provide demand to these semi-stranded assets and make renewables in Texas economically viable, according to Castle Island Venture’s Nic Carter.
Back said the off-grid mine, expected to be completed later this year, highlights another key tenet of the bitcoin network: Miners are location agnostic and can “do it from anywhere without local infrastructure.”
