bitcoin in desert sand

Crusoe Energy Brings Bitcoin Mining to the Middle East: A Win for Both Crypto and Climate

Bitcoin mining has long been a controversial topic, and has not been a stranger to criticism for its high energy consumption and potential environmental impact. However, one company, Crusoe Energy, is turning this narrative around by bringing Bitcoin mining to the Middle East while also tackling a significant environmental issue.

Crusoe Energy: Pioneering a Green Bitcoin Mining Revolution


Crusoe Energy, a privately held U.S. company, has carved out a unique niche in the Bitcoin mining industry which might just pave the way for the future. The company has developed a new technique of mining Bitcoin that uses wasted natural gas as a power source. The ingenious move minimizes environmental impact, aligns mining operations with climate preservation, and makes use of a resource that would have been wasted. This is the type of eco-innovation the industry needs.


This innovative approach caught the attention of Mubadala, the sovereign wealth fund of Abu Dhabi, and the Oman Investment Authority (OIA), both of which participated in a $350 million funding round that closed in April. With these substantial investments, Crusoe Energy is set to expand its operations beyond the U.S., where it already operates several mobile sites and works with energy producers like Devon Energy, Kraken Oil & Gas, and Canada’s Enerplus.

bitcoin in desert sand

Setting up Shop in the Middle East


As part of its major plan for growth, Crusoe Energy will open offices in Oman's capital city of Muscat and in Abu Dhabi. Crusoe's move makes it the first company to introduce flare gas Bitcoin mining in the Middle East and North Africa (MENA) region.


But what is flare gas, and why is it important? Flaring is a process used in oil drilling operations where excess natural gas is burned off into the atmosphere due to a lack of transportation infrastructure. This process is incredibly wasteful and has a negative environmental impact, as the natural gas could otherwise be used as a valuable energy source. 


Crusoe Energy's patented digital flare mitigation systems use this otherwise wasted gas to power Bitcoin mining operations, effectively turning a detrimental process into a beneficial one.

Bitcoin Mining: Still Profitable in 2023


In 2023, Bitcoin mining remains a lucrative venture. Bitcoin miners are currently mining around $20 million worth of Bitcoin per day, or $600 million per month. Miners are rewarded with 6.25 bitcoins for each block they mine, a number that will reduce to 3.125 bitcoins after the halving event takes place in 2024. 


The profitability of Bitcoin mining is also tied to the computational power of the mining hardware, which is specialized computers created specifically for mining bitcoins. The more powerful the hardware, the more profitable the bitcoin mining operation will be.

Bitcoin Mining Revenue: Block Rewards and Transaction Fees

 

Bitcoin miners generate revenue from two main sources: block rewards and transaction fees. Block rewards are newly-minted bitcoins awarded to the miner who can discover a new block the fastest. This reward halves roughly every four years as a feature of Bitcoin's code to control the rate of new Bitcoin creation and thus manage inflation. In addition to block rewards, miners can also earn transaction fees paid by Bitcoin users for securely logging their transactions onto the blockchain.


A Bright Future for Bitcoin Mining in the Middle East

 

The move by Crusoe Energy is a promising development for both the cryptocurrency and energy sectors in the Middle East. Crusoe's CEO, Chase Lochmiller, has expressed hopes that Oman and Abu Dhabi can serve as launching points for future expansion into other nations in the region who are facing similar challenges with flaring, including Saudi Arabia.


As Crusoe Energy plants its roots in the Middle East, it brings with it the potential for a whole new generation of digital technology in the region, coupling environmental responsibility with technological innovation. Crusoe's digital flare mitigation technology can help solve the region’s long-standing flaring challenges and reduce emissions, while also fostering the growth of new technologically enabled industries.


Crusoe Energy's Middle East expansion marks a significant milestone in the journey toward sustainable Bitcoin mining. The company's innovative approach could potentially change the face of Bitcoin mining as we know it, demonstrating how the industry has the power and the means to transform environmental challenges into opportunities for profitable and sustainable operations. 


In a world increasingly conscious of our environmental impact, Crusoe Energy's model offers a promising way forward for bitcoin mining, aligning the future of computing with the future of the climate.

Frequently Asked Questions


1. What is Crusoe Energy? 

Crusoe Energy is a privately held U.S. company that has pioneered a method of mining Bitcoin using wasted natural gas as a power source. The company's unique approach aligns Bitcoin mining operations with climate preservation and leverages an otherwise wasted resource.


2. How does Crusoe Energy's method of Bitcoin mining work? 

Crusoe Energy uses the process of flaring, which is common in oil drilling operations, to power their Bitcoin mining. Flaring is a process where excess natural gas is burned off into the atmosphere because of a lack of transportation infrastructure. Crusoe's patented digital flare mitigation systems use this otherwise wasted gas to power Bitcoin mining operations.


3. Why is Crusoe Energy expanding to the Middle East? 

Crusoe Energy is expanding to the Middle East because of the region's significant flaring challenges. The company sees an opportunity to use its digital flare mitigation technology to both reduce emissions and foster new technologically enabled industries in the region.


4. How profitable is Bitcoin mining in 2023? 

As of 2023, Bitcoin miners are mining around $20 million worth of Bitcoin per day, or $600 million per month. The profitability of Bitcoin mining is linked to the computational power of the mining hardware, with more powerful hardware making the operation more profitable.


5. What are the sources of revenue for Bitcoin miners? 

Bitcoin miners generate revenue from two main sources: block rewards and transaction fees. Block rewards are newly-minted bitcoins awarded to the miner who is quickest to discover a new block. This reward halves roughly every four years to control the rate of new Bitcoin creation. In addition to block rewards, miners earn transaction fees paid by Bitcoin users for recording their transactions securely onto the blockchain.

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