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Guest Blog: Can Solar Power Increase Your Cryptomining Profits?

Cryptocurrencies, like Bitcoin, are believed by many to be the wave of the future. This encrypted digital currency is backed not by the gold standard, but by complex mathematics. You cannot hold a Bitcoin and you cannot place it in your wallet. It exists in a virtual environment, from which it is mined, distributed and traded.

Many also believe that renewable energy, such as solar power, will be a vital piece of the puzzle that is human growth. Clean sources of energy help to decrease our reliance on fossil fuel and natural gas, which exist in finite amounts. Solar and wind power initiatives aid in both maintaining our fragile environment and saving users money on their growing utility costs.

While both cryptocurrency and solar power separately could become huge parts of our society in the years to come, can they function together? Can solar power help Bitcoin miners overcome perhaps the greatest threat to their potential earnings? And will Bitcoin’s growing value aid the solar industry’s expansion?
Note: Bitcoin, as of early 2018, is still a very risky and speculative asset. Different countries are changing their laws on Bitcoin and Bitcoin mining nearly every year, as well as the tax implications of owning and trading Bitcoin. We highly recommend you exercise caution when considering capital or monetary investments into Bitcoin and other cryptocurrencies.

Energy Bills, The Bitcoin Miner’s Arch Enemy
Much like the prospectors of old California, Bitcoin miners ply their trade to find more currency. While these crypto miners aren’t actually getting their hands dirty, this form of currency acquisition costs them big money.

The increased value of this currency and the explosion of the Bitcoin mining industry has led to a form of electronic escalation. In 2009, it was possible to mine 200 Bitcoins in just a few days for one person on their personal computer. Fast forward to 2014, and it would take 98 years for that same person to mine just one Bitcoin. To counter this, miners began banding together into mining pools, in which various individuals work together to mine Bitcoin and split the profits amongst the team.

But as Bitcoin continues to grow, it takes a lot of power to keep up with the industry’s flow. Personal computers have given way to advanced hardware systems and massive super computers, which suck up a lot of power. Now, miners are seeing their profits offset by not only the cost of their equipment, but by skyrocketing energy bills which suck the money out of their pockets.

In September 2017, blogger Gregory Trubetskoy estimated the electric cost of mining one Bitcoin to be $1,567.88, based on the average national electricity costs of $0.12 per kW/h. As people flock to Bitcoin’s increasing profitability, the mining algorithms become more complex, requiring more power. Experts theorize that by 2020, the global Bitcoin mining industry will consume enough electricity to power a small country, such as Denmark.

The debate over whether Bitcoin mining is worth the energy (for society) is mostly philosophical, at this point. Proponents believe that achieving a decentralized currency is, in fact, worth the enormous energy expenditure. Detractors would argue that credit card networks and banks already achieve many more transactions for less energy than Bitcoin takes. Cryptocurrencies like Stellar, Ripple, and Ethereum are all able to achieve more transactions with less energy, and they may one day eclipse Bitcoin for this reason, alone.

Solar to the Rescue
Solar allows Bitcoin miners to keep more of the money they earn, and prevents home based miners and smaller pools from getting priced out of the industry. Miners sink a lot of money into their equipment, so they want to ensure that their return on investment will be as strong as possible. With solar power taking a chunk of their costs and putting it back in their pockets, the Bitcoin mining industry becomes a more profitable environment.

But solar does more than save money. This beneficial power source also helps the planet by taking a bite out of the industry’s explosive energy consumption. We’re losing fossil fuels at an alarming rate, and an additional small country’s worth of power per-year with no renewable component is only going to hasten that depletion. By turning to solar power, the Bitcoin mining industry can save their finances while also doing their part to help the environment.

Crunch the Numbers
We’ve talked quite a bit about the potential benefits of using solar energy to offset mining utility costs, but where are the numbers, right? Talk is cheap, but investments are not. To that end, we’ve compiled a sample scenario to showcase what individual miners could stand to save by implementing renewable solar power into their set-up.

These numbers were compiled from www.99Bitcoins.com and altered to reflect current Bitcoin values, as of early January, 2018.

In this scenario:
– The location has 30 250-watt solar panels, generating 30 kW/h each, per-month (learn more about Solar Costs at PowerScout)
– We’re operating under the standard nation-wide energy cost of $0.12 per kW/h
– There is a 2% mining pool fee for all pool members
– 12.5 Bitcoins are the mining block reward
– Operating on a 14 TH/s hash rate
– Power consumption is 1,375 Watts
– The value of one Bitcoin, as taken on January 5, 2018 from https://www.coindesk.com/calculator/ is $16,689.69

Without Solar
Duration: 1 Month
Estimated BTCs Earned: 0.11439362
Estimated Pool Fees in BTC: 0.00228787
Estimated Utility Cost: $118.80
Estimated Profit: $1,736.30

In this sample scenario, the miner would see an annual profit of $20,835.60
– The miner is using 990 kW/h per-month
– The miner is using 11,880 kW/h per-year
– Annual electric bills for mining efforts alone would equal $1,425.60, should energy consumption stay the same.

With Solar
Duration: 1 Month
Estimated BTCs Earned: 0.11439362
Estimated Pool Fees in BTC: 0.00228787
Estimated Utility Cost: $10.80
Estimated Profit: $1,844.30

In this sample scenario, the miner would see an annual profit of $22,131.60
– The 30 250-Watt solar panels generate 900 kW/h per-month
– The miner saves $108 in energy costs every month
– The miner saves $1,296 per-year
– The miner saves $6,480 over five years
– The miner saves $12,960 over 10 years

You Be the Judge
The savings that solar panels bring to a Bitcoin mining operation are vast. By saving an excess of $1,200 per-year, miners can offset the cost of their equipment and reap higher rewards. As Bitcoin value continues to skyrocket into 2018, the numbers shown here will only increase.

Investing in solar power is a cost effective and environmentally beneficial way to get the very most out of your Bitcoin mining operation. Save money, help save the environment and set your Bitcoin mining career on a permanent upswing by embracing Bitcoin and solar, the partnership of tomorrow.

Thanks to Kyle Pennell from PowerScout (home solar marketplace that lets you compare multiple quotes for home solar) for contributing this article.