A miner with roughly 1 EH of Bitcoin’s hashrate is advertising their blocks as “carbon negative.”
So how can a miner produce work and leave a negative carbon footprint, seemingly reversing entropy?
Well, the short answer is, of course they can’t, but how can they claim carbon negativity at all?
It’s likely that the miner is using renewable energy to power their operations in addition to purchasing carbon credits/offsets. This one-two-punch would take them from carbon neutrality to carbon negativity -- on paper, that is.
In practice, it’s more complicated. Whether it be mining and refining lithium for solar panels, manufacturing steel and concrete for hydro dams, or fabricating fiberglass for wind turbines, renewable infrastructure relies on fossil fuels in the manufacturing process. Even if they operate more-or-less green once erected, these renewable sources have large carbon footprints of their own.
For this miner’s purposes, though, the specifics are probably irrelevant. The miner in question likely just wants it on record that its operations are negative insofar as perceived government scrutiny or public perception are concerned.
If the mining operation is situated in North America (highly likely), the preventative measure falls in line with other miners on the continent who have made ESG-friendly and/or 100% carbon neutral operations a major plank of their business platforms.
As climate change drives policy decisions in the decade to come, we expect miners, especially larger-scale, on-grid participants, to take measures similar to this one in order to appease the public and officials.
How much would it cost to be carbon negative?
Using Blue Sky’s figures for carbon emissions per energy source, we calculated how much carbon offsets would cost while running 1 EH of hashrate using popular renewables. We assume the miner consumes roughly 37 MW of power, is using new generation equipment, and has an uptime of 98%.
Per energy source, carbon offset credits would add roughly the following costs to a miner's OPEX:
Solar: $579k / year
Hydro: $22.1k / year
Wind: $71.5k / year
Assuming the miner is self-mining with a power cost of $0.03/kWh, their OPEX without purchasing credits is roughly $9.5 million a year. A miner using a hosting facility with $0.06/kWh would have roughly an annual OPEX of $19 million.