A cryptocurrency is loosely defined as a currency that uses tokens or “coins” and exists on a distributed and decentralized ledger. Crypto mining, on the other hand, is the process by which new coins are entered into circulation by using sophisticated computers that solve complex computational mathematical problems to form a critical component of the maintenance and development of the blockchain ledger.
Crypto mining has a magnetic appeal for many investors interested in cryptocurrency because miners are rewarded for their work in crypto tokens (or the so-called “coins”). And this may be because entrepreneurs are now seeing mining as “pennies from heaven”, much like the California gold prospectors in 1849.
So, in a world where nothing is impossible, comes word of a cattle farmer in north-east Wales who is using the waste from his bovines to farm cryptocurrency, Ethereum.
Philip Hughes and his family have been farming with only cattle for many generations – until now, where he has placed a shipping container next to a large domed tank, which is now thriving as a crypto farm.
The farm uses a massive six-cylinder engine that runs at 500 rpm to turn methane (given off by decomposing cow manure) into electricity. The process is called anaerobic digestion.
In the absence of oxygen, microbes break down the manure and produce methane, which can be combusted to produce heat and electricity, instead of entering the atmosphere as a powerful greenhouse gas.
These machines work on complex computations that serve to verify transactions, and in return, the farmers are remunerated with the new cryptocurrency. About two-thirds of the electricity generated by the anaerobic digester helps power the farm itself and the remainder is used to power mining rigs and specialist computers.
Philip and his family have been pitching cryptocurrency mining to small-scale renewable electricity generators for some time now, and Philip says his anaerobic digestion equipment has since been adopted in 42 sites, covering solar, hydro, and wind-powered generators.
However, other small-scale hydro projects seem a bit warier – they claim to worry about the environmental impact of the cryptocurrencies, and others doubt that the currencies will be valuable for long enough (or consistently enough) to repay the considerable capital investment that hydropower requires.
The decline of heavy industry has left some parts of the US with a surplus of hydroelectric power, resulting in cheap electricity that has attracted cryptocurrency miners. But communities who have experienced a “gold rush” of crypto miners have found it a mixed blessing as they see it pushing up their own electricity prices.
The Anaerobic Digestion and Bioresources Association says only a small handful of plants are exploring crypto mining – and Philip claims to be acutely aware that his cryptocurrency business is based upon producing an erratic asset that’s value can rise or fall dramatically, from as little as a single remark by Elon Musk or Donald Trump. If the market does happen to collapse, he says, he will put the computing power of the rigs to other uses.