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Economic viability of bitcoin mining using a renewable-based SOFC power system to supply the electrical power demand

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  • Malfuzi, A.
  • Mehr, A.S.
  • Rosen, Marc A.
  • Alharthi, M.
  • Kurilova, A.A.

Abstract

One of Bitcoin’s most significant problems is its seemingly insatiable use of electricity. In the present research, along with providing the required power for Bitcoin (BTC) mining, a solid oxide fuel cell (SOFC) system fed either by natural gas or biogas as a renewable source of energy is used to supply the electricity demand. Thermodynamic modeling for the fuel cell system is applied to determine the required biogas or natural gas. For the proposed cases (grid-based, natural gas-fed SOFC and biogas fed SOFC), various scenarios depending on the Bitcoin price and mining difficulty are proposed. Also, the economic viability for each scenario in several countries is investigated and compared. Results indicate more profitability for grid-based mining in Bitcoin prices up to $20,000, but as the Bitcoin price increases SOFC based mining operations achieve reasonable profitability. It is shown that Iran, Russia, and China with cumulative cash flows of $87,300, $77,200 and $70,500 respectively, are the best countries to mine BTC using grid electricity while Iran, Canada and Russia are the best countries using a natural gas-fed SOFC system. While the profitability of SOFC-based mining is lower than grid-based mining, the latter method compensates with better sustainability and lower environmental costs.

Suggested Citation

  • Malfuzi, A. & Mehr, A.S. & Rosen, Marc A. & Alharthi, M. & Kurilova, A.A., 2020. "Economic viability of bitcoin mining using a renewable-based SOFC power system to supply the electrical power demand," Energy, Elsevier, vol. 203(C).
    • Handle: RePEc:eee:energy:v:203:y:2020:i:c:s0360544220309506
    DOI: 10.1016/j.energy.2020.117843
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    References listed on IDEAS

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    1. Luisanna Cocco & Michele Marchesi, 2016. "Modeling and Simulation of the Economics of Mining in the Bitcoin Market," PLOS ONE, Public Library of Science, vol. 11(10), pages 1-31, October.
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    Cited by:

    1. Anatolyy Dzyuba & Irina Solovyeva & Dmitry Konopelko, 2023. "Managing Electricity Costs in Industrial Mining and Cryptocurrency Data Centers," International Journal of Energy Economics and Policy, Econjournals, vol. 13(4), pages 76-90, July.
    2. Sergio Luis Náñez Alonso & Javier Jorge-Vázquez & Miguel Ángel Echarte Fernández & Ricardo Francisco Reier Forradellas, 2021. "Cryptocurrency Mining from an Economic and Environmental Perspective. Analysis of the Most and Least Sustainable Countries," Energies, MDPI, vol. 14(14), pages 1-22, July.
    3. Juan Ignacio Ibañez & Alexander Freier, 2023. "Bitcoin’s Carbon Footprint Revisited: Proof of Work Mining for Renewable Energy Expansion," Challenges, MDPI, vol. 14(3), pages 1-21, August.
    4. Jana, Rabin K. & Ghosh, Indranil & Wallin, Martin W., 2022. "Taming energy and electronic waste generation in bitcoin mining: Insights from Facebook prophet and deep neural network," Technological Forecasting and Social Change, Elsevier, vol. 178(C).
    5. Xu, Yuhao & Luo, Xiaobing & Tu, Zhengkai & Siew Hwa Chan,, 2022. "Multi-criteria assessment of solid oxide fuel cell–combined cooling, heating, and power system model for residential application," Energy, Elsevier, vol. 259(C).

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