Crusoe Energy Systems has raised $30 million in equity financing along with $40 million project financing to open a bitcoin mining facility. Known as a flare mitigation provider, Crusoe converts natural gas that would have otherwise been burned to energy-intensive computation that can be used to mine” target=”_new” rel=”nofollow”>https://messari.io/resource/mining”>mine bitcoin. This eliminates waste and provides energy companies a cost-effective means to reduce emissions. Flaring has reached record levels in Texas due to a lack of pipeline capacity which has increased demand for flare mitigation services. Crusoe has already established itself in three oilfields: Wyoming’s Powder River Basin, Colorado’s Denver-Julesburg and North Dakota/Montana’s Bakken oilfield.
While China has historically dominated the bitcoin mining industry, more facilities have been started or are expanding into the U.S. over the past 12 months.
Why it matters:
Geographic concentration in China is often touted as an existential threat to bitcoin. If the Chinese government were to co-opt these facilities, in theory, they would be able to control the majority of hash” target=”_new” rel=”nofollow”>https://messari.io/resource/hash-power”>hash power. However, operating in China comes with a host of regulatory and political risks which despite the increased marginal cost of energy has led to increasingly more interest in the U.S. As more mining moves to the U.S., the concentration risk will be further mitigated.
Energy consumption is another frequently mentioned downside of bitcoin, but flare mitigation services have the potential to change this narrative as it’s not wasting energy but rather salvaging value from it.