Blockstream CEO details partnership with Tesla for solar-powered bitcoin mining
Blockstream CEO Adam Back joins Yahoo Finance Live to discuss mining bitcoin using renewable energy sources, the company's new partnership with Tesla, and the outlook for the crypto market.
Video Transcript
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BRIAN CHEUNG: Well, in today's "Crypto Corner," I want to talk about bitcoin mining, which remains a buzzy story in the world of digital assets. Blockstream, Tesla and Block are among the names teaming up to mine Bitcoin using renewable energy. Adam Back is the CEO of Blockstream and joins us live to talk a little bit more about this partnership.
Adam, tell us a little bit more about why you decided to go about this project. We know that there's been a lot of criticism about how energy-intensive bitcoin mining can be. What do you hope to get from your partners, Tesla and Block, in this project?
ADAM BACK: Yeah, so we do mining at different locations, including in the Quebec province of Canada, which is mostly hydro, has a great deal of excess power. But different parts of the world have less zero-emission power. And our thesis is that actually, contrary to expectation, bitcoin mining is great for monetizing and making profitable the ability to expand power infrastructure. So while policymakers are keen to see more zero-emission power infrastructure, on the ground, things get built by people finding business models that work, that enable the project financing of them.
- Adam, we have seen a huge migration in terms of where the mining happens since what happened over in China. We've heard the argument, at least here in the US, in places like Texas-- because of the availability of renewable power, that allows these mining operations to set up in a more sustainable way. Is this just the result of this shift that's happening over to areas that already have that kind of power in place?
ADAM BACK: Yeah, so there's a couple of things. One is that, obviously, renewables don't have the costs of extraction, refinery, and transport. So they tend to be cheaper, less-- there's no ongoing fuel costs. The maintenance cost once you built the project is very low.
So mining seeks out low-cost power. It can be at any location. So it can be [INAUDIBLE] in remote locations. And I think the key differentiator for mining as compared to a conventional new zero-emissions power plant is that bitcoin can provide 100% duty cycle. That is to say it can pay for and use any unused power, whereas if somebody is to start a project for a new town or a town with an industrial park or some industry expected, initially, it would be a very low due cycle.
Power plants are typically overbuilt by a factor of two or three, so most of the power goes unused. And so being able to pay for and use all of the excess power greatly improves the return on investment and the time period in which the project will make money. That, therefore, helps people to fund and construct more power infrastructure and improve the amount of zero-emission power in the world.
- I mean, is that flexibility you just pointed to-- is that why you're able to switch in this way? I mean, the thing that we keep hearing about renewable power is that it's great when the sun is shining, the wind's blowing, but it's those dark hours at night that are always the biggest challenge in terms of storing power so you can keep the operation going. How do you address that?
ADAM BACK: So the project is between Blockstream and Block, and we work with Tesla to provide the solar installation and also the Tesla Megapack. So we overprovision the solar so it can charge the batteries and run when the sun's not shining as well.
