Old Tires to Bitcoin: How Two Companies Plan to Make Crypto Out of Junk
Mining cryptocurrency is a very energy expensive endeavor. But what if you were able to convert garbage into electricity? That would mean an almost limitless and nearly free source of energy. In the case of two American companies, they have the technology to “demanufacture” car tires and convert them into electrical energy. It’s with this tech that they intend to become serious cryptocurrency miners.
From Car Tires to Crypto
PRTI, Inc hopes to convert old tires into an efficient use of new energy. Standard American Mining is the cryptocurrency mining company that has teamed up with PRTI to combine the low-cost energy source with high-profit crypto mining.
According to an official statement from Standard American Mining, PRTI takes “Whole car tires and turns them into oil, steel, carbon, and power.” It is this final piece, power, that they intend to use to mine cryptocurrency.
The news release from SAM does not specify any one particular currency, but as the issue is free electricity, it is conceivable that they could be mining almost anything that would prove profitable.
Despite the high difficulty, Bitcoin mining has seen a growing return due to the sudden increase in prices that the market has seen towards the end of the year.
Ethereum, on the other hand, has become less profitable to mine as more miners enter the space. Ether prices have increased somewhat, but nowhere near the surge, that bitcoin has seen. Also important to note, is that Ethereum plans to switch to proof-of-stake in 2018, thus eliminating mining.
Other possible currencies could include Zcash, Ethereum Classic, or Litecoin, among many other potential mining candidates.
Estimated Savings in the Thousands
When talking about mining, it is important to think about how much electricity a mining operation is using. Let us consider the Antminer S9 for example.
The S9 consumes 1600w of electricity. At relatively standard rates of $0.10 per kWh, that means it would cost $3.84 per day to run a single S9, 24 hours a day. Per year, that would be $1,400.
A large-scale mining operation probably has at least 100 of these machines, if not more. Assuming 100 devices, that would give us a cost of $140,000 annually.
At this price range, mining bitcoin is still quite profitable. The machines will likely generate enough bitcoin to pay for themselves, and the operation will hit profitability within a few months. If we take out the energy costs, however, we not only break even much faster but also generate more profit annually.
While it is true that acquiring old car tires may be free or close to free, it is not without its external costs. Specifically, demanufacturing car tires will almost certainly cause the release of various pollutants into the environment.
According to a recent report on gold mining, Bitcoin mining consumes 6.6 million barrels of oil (in equivalent energy) per year. These figures may seem high, but when compared to the energy use of gold mining of 123.2 million barrels per year, crypto mining energy use is far less.
That being said, miners and community members are constantly faced with the same dilemma. Determining the value of bitcoin also means evaluating the costs of the digital currency’s generation. CEO of American Standard Mining Anthony Pompliano told Motherboard that the company’s focus is not distinctly crypto either:
“As we build more and more of these, we’re building computing facilities—cryptocurrency is the most profitable application of this computing power today, but over time there will probably be more profitable applications. We’re less concerned with what label we have, and more concerned with building out a distributed computing network at a lower cost than the big guys.”
While burning tires may be financially free, it is certainly not environmentally free.