In the frozen north of Canada, shipping containers housing bitcoin farms hum with activity, converting unused energy into profit.
Tens of thousands of ‘stranded’ gas wells lay unused due to the logistical difficulties of extracting energy and transporting it from the remote wilderness to induct it into the power grid.
Chief executive of Saudi-backed PermianChain and Brox Equity Mohamed El-Masri spoke to Al Arabiya English about how his company is harnessing waste energy to help the environment, and potentially benefit local communities.
“Bitcoin that’s being mined on site in these remote areas can be put back into the local community to build hospitals, community centers, so there’s a lot of wasted resource that could be monetized and put back into the economy,” he said.
“There is a net benefit at the end of the day, and you’re not eliminating the environmental concerns here, but you’re significantly reducing them.”
PermianChain and Brox Equity harness stranded energy and use it to power around 400 bitcoin rigs, with Brox operating the sites and PermianChain providing the technology and managing the mining.
The rigs are computers that perform complex mathematical tasks to produce bitcoins. The costs of powering them traditionally prohibit how much profit can be generated.
Companies like PermianChain are offering a creative solution to the problem, lowering power costs for investors.
Customers buy their own bitcoin rigs from the company, which manages the equipment – providing electricity, maintenance, and security for a fee.
“If you don’t own the server, then you're not really mining bitcoin, you don't own the computing power,” El-Masri said.
“When you own your rig, you own your server. You can track the data and you know everything about how the server is performing, and you’re actually generating bitcoin directly into your wallet address,” he added.
“People sign up with us because one we provide a sense of ownership.”
Brox Equity and PermianChain recently received a significant investment from Saudi Arabia’s Herz Investment Company, and have other backers in the Kingdom and Dubai
“I believe in the Saudi market, there’s a lot of potential there,” El-Masri said. “Sophisticated investors within the Saudi culture have always been interested in innovation and, from my experience, I’ve seen people have a good risk appetite, which provides good investor sentiment in the long term.”
As well as stranded gas, the company also plans to harness gas that is produced as a byproduct of oil drilling.
This gas is often flared due to prohibitive storage or transport costs, contributing to carbon dioxide emissions.
PermianChain’s solution is to sell ‘digital energy currency,’ which corresponds to a certain amount of energy that can be produced by a site.
These digital tokens can then be redeemed and used to power bitcoin rigs.
Around 142 billion cubic meters of gas was flared in 2020, according to the International Energy Agency (IEA) – which would have met the natural gas demand of the whole of Central and South America.
“We’re coming with a solution for that wasted gas. We no longer need to flare it. We can monetize it in a clean way and benefit social and economic development.”