Heating up by mining Bitcoin? “It’s cheaper than gas”

Companies that still have cheap electricity contracts should consider placing Bitcoin miners. The computers work as well as a gas heater and also give Bitcoins.

Can 24/7 Bitcoin mining computers outperform a traditional gas heating system for office buildings? Of course, but of course it depends heavily on the current electricity prices, believes Bert de Groot, a Dutch entrepreneur who recently started Bitcoin Brabant and now installs mining installations for companies.

“It is simply cheaper at the moment to warm up with a computer. Especially if you’re currently burning gas,” says de Groot Business AM. Since gas prices went through the roof at the beginning of this year, the Dutchman has been able to place a first miner in a company with his sole proprietorship Bitcoin Brabant. Since then, the ball has started rolling and he has already placed dozens of installations.

“You really have to have a good electricity price to be able to do this. Last year I mined at home with an electricity price below 5 cents per kilowatt hour. The profit margin for mining was high at the time,” de Groot points out. But when prices rose above 25 cents in January and eventually reached around 60 to 70 cents in the Netherlands, mining from home became unaffordable. “When gas prices started to rise, I came into contact with someone who was going to install old electric heaters in his greenhouse. I suggested setting up miners there because that person still had a cheap electricity contract. Since then I have had a lot of inquiries,” says de Groot.

Bitcoin Brabant has already installed thirteen installations this year. A next installation for a restaurant in Antwerp is still in the planning stage and also a single miner for a large company where the hall is still heated with gas radiant heaters. “We will check whether we can completely replace gas there,” it reads.

How much do you really save by heating through mining?

A mining computer produces about the same amount of heat as an average household uses gas. If you have an efficient gas boiler, you will use 1,200 cubic meters of gas on an annual basis, at de Groot. In companies, less efficient gas boilers are usually in use and the consumption is much higher.

“If your company building is properly insulated, you can save around 1,200 cubic meters of gas per year with a miner. Currently, gas prices are above 2 euros. This means that you save 2,500 euros in gas expenses per year. The price of a miner is currently under 10,000 euros. In the long term, the price savings from gas reduction are enormous. And then you have the income from Bitcoin mining itself,” says the Dutchman.

Bitcoin income is guaranteed, despite the fact that mining takes place through thousands of computers constantly competing to be the first to unlock a piece of code. Your miners’ computing power is added to a so-called mining pool; a group where miners join together to mine Bitcoinblocks. The owner of a miner is paid daily in Bitcoin depending on the computing power he/she provides and depending on the amount of blocks the mining pool was able to mine together that day.

De Groot’s clients are usually associated with the mining group SlushPool, which provides a total of 4.29 percent of the Bitcoin system’s computing power. In the last seven days, the group has already been able to mine 43 blocks and add them to the Bitcoin blockchain. It already gave 268.75 Bitcoins to the miners of SlushPool, according to the current block reward. So 5.1 million euros were distributed among all miners in the group. A customer of De Groot, who installed a miner to heat plants in a greenhouse, earned about 7.5 euros every day through this system. This means a passive annual income of around 2,700 euros according to the current price of Bitcoin.

Screenshot of mempool.space, September 21, 2022.

“Miners are day and night, especially when they’re new because that’s when they’re most efficient. They’re just continuously delivering a return,” it still reads.

Pumping excess solar panels into a miner at home

De Groot also sees various applications emerging for mining computers in the coming years. “What will still happen is that there will be surpluses due to the energy transition to sustainable ways of producing electricity. “Bitcoin miners may play an important role here in balancing the power grid, as in the US state of Texas,” says the entrepreneur.

If there is not enough wind or sun for a while, it will be difficult to deploy a gas-fired power plant in the short term to compensate for a shortfall in the electricity grid. “What you can do is turn off a constant power demand, such as these miners,” adds de Groot. The mining computers can be turned off immediately and thus can respond directly to the power available on the grid.

Also interesting: de Groot notes that you can use the computers to use surplus from your solar panels. “When a battery in your house is fully charged in the summer, you’d rather have a machine that you can turn on to pump in that extra energy and give something,” it reads.

Bitcoin has never been pumped as much computing power as it is today, despite the cryptocurrency’s recent lower price. “It says a lot about what people think about the future of Bitcoin. People continue to mine it, sometimes even at a loss,” concludes de Groot.

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