Tesla Teams Up with Block and Blockstream to Mine BTC in Texas

Blockstream has also commenced the construction of a solar Bitcoin mining facility. The facility will be based in Texas, and it will offer mining services alongside other pro-crypto companies such as Block and Tesla.

Bitcoin mining has been plagued by an intense debate over its impact on the environment. The computational power needed to mine Bitcoin is notably high, and it has created concern over the future of proof-of-work networks such as Bitcoin. However, there have been arguments about how Bitcoin mining can incentivize the renewable energy sector.

Tesla partners with Block & Blockstream for BTC mining

The partnership between Tesla, Block and Blockstream was announced in 2021. At the time, Block announced committing $5 million towards the initiative. Blockstream has said that the construction of the mining facility will be complete by the end of the year.

The facility will solely depend upon solar energy. Bitcoin mining operations from the facility will be done using Tesla photovoltaics and Megapack battery equipment. The equipment will only run using renewable energy. The 3.8 megawatts (MW) Tesla solar array and the 12 megawatt-hour (MWh) hour batteries can generate 30 petahashes per second of mining power.

Bitcoin mining is dependent upon the hash rate. The hash rate is the computational power needed to mine and process Bitcoin transactions. The computational power of this mining equipment is notably high, with the facility estimated to mine around 4.11 BTC per month. This is a significantly high mining power, given that Bitcoin’s price at the time of writing was around $43,000.

“We’re excited to share our collaborative effort with [Blocks] to build a fully solar-powered #BitcoinMining facility has begun. [Tesla] photovoltaics & Megapack will power the 30 PH/s facility, aiming to show the world 100% zero-emission #Bitcoin mining at scale is viable,” the announcement said.

The Blockstream facility built in partnership with Block and Tesla will be significantly smaller than the facility built by RIOT Blockchain. The RIOT Blockchain Bitcoin miner has a 300MW facility in Whinstone, US. The platform initially belonged to the Alcoa aluminium plant in Rockdale, Texas. Once the mining facility is fully operational, it will generate 750 MW of power.

Blockstream’s initiative is not to build the biggest mining facility in North America, but it could simply be a strategy to show that Bitcoin mining can be indeed done using renewable energy.

Debate over PoW Bitcoin mining

The proof-of-work Bitcoin mining consensus has been criticized because of the high energy usage. PoW networks rely on a lot of energy to validate blocks, and environmentalists have raised the alarm over these systems.

Last year, Tesla’s CEO, Elon Musk, called upon North American miners to transition to renewable. Musk even held a meeting with miners in the region to discuss how Bitcoin mining can fully rely on renewable energy. The meeting happened after Tesla announced that it would no longer accept Bitcoin payments because of environmental concerns.

The European Union recently proposed a ban on proof of work Bitcoin mining because of its energy-intensive nature. However, the proposal was brought down after most legislatures voted against it.

The co-founder of Ripple, Chris Larsen, has also funded a campaign that seeks to change Bitcoin’s code and transition it to another consensus. Larsen donated $5 million towards the campaign. However, it faced opposition from the Bitcoin community, saying that Bitcoin’s reliance on a proof-of-work consensus guaranteed its security.

Ethereum, the second-largest cryptocurrency, is transitioning towards a proof-of-stake model. Ether will transition to PoS in the coming months, and the community has strongly supported the development.