Texas Bitcoin Miner Giga Partners with Argentina’s Phoenix Global | Wilnesh News

The Argentinian province of Mendoza is famous for its vineyards and rich Malbec wine.But the popular wine region in the foothills of the Andes is also the home of wine The world’s second largest shale gas reserves It’s called Vaca Muerta, which translates to “dead cow.”

for two texas Bitcoin For miners, oil deposits offer a dream resource: wasted energy.

Brent Whitehead and Matt Lohstroh, both Texas A&M graduates, have been mining Bitcoin Has been working in the oil fields of East Texas since 2019.That’s when they formed Jijia Energy The goal is to harness burned natural gas and convert it into electricity to run Bitcoin mining farms, which are notoriously power-hungry.

On Tuesday, Giga announced its first expansion into Argentina, following expansion in the United States and Shanghai. The company is working with Phoenix Global Resources, an oil and gas company with operations in Mendoza, and Exa Tech, an IT services company, to launch a 2-megawatt Bitcoin mining farm on top of Vaca Muerta.

Giga’s system involves placing a container filled with thousands of Bitcoin miners over an oil well and then transferring the natural gas to a generator, which converts the natural gas into electricity to power the miners. The process reduces CO2 equivalent emissions by approximately 63% compared to continuous combustion or burning of unused gas, According to research from Crusoe Energy Systems of Denver. It also turns wasted energy into a valuable asset for oil producers.

“By capturing stranded natural gas to power energy-intensive computing in modular data centers, Giga is actively contributing to reducing global methane emissions,” Whitehead told CNBC. String “wildcats,” a term used to describe those engaged in high-risk exploratory drilling.

At the small pilot site in Argentina, Exa Tech is responsible for ground operations, Phoenix Global provides the gas, and Giga provides the equipment.

Bitcoin mining has been particularly profitable whenever the cryptocurrency has a bull run, making current market conditions particularly suitable for expansion.Bitcoin has soared 170% in the past six months, hitting multiple all-time highs recently, with the rally driven in part by optimism surrounding the launch of a spot Bitcoin exchange-traded fund in the United States.

The boom has helped boost the share prices of publicly traded Bitcoin miners. Anti-riot platform The value has more than quadrupled in the last year. clean spark It grew more than five times in 2023 and grew by 112% this year. Crypto mining It soared more than 600% last year and will grow 27% in 2024.

Lohstroh told CNBC that Giga has earned more than $10 million so far this season. It’s not the only miner to see opportunity in Argentina, which ranks 12th among the world’s largest emitters of methane, according to the World Bank.

Crusoe, which helps oil companies like ExxonMobil turn flare gases into useful resources, Helped launch a Bitcoin mining farm in Vaca Muerta in juneas part of an ongoing effort to reduce the energy waste and environmental impact caused by natural gas combustion.

Giga’s mines are intentionally small from the start and are not yet planned to be profitable. The company first wants to ensure it can successfully import all necessary equipment before scaling up operations. The mine has been undergoing testing since December, and Lohstroh estimates that it has mined $200,000 to $250,000 worth of Bitcoin.

Giga estimates that the mine’s upstream facilities will reduce carbon dioxide emissions by approximately 30,000 tons per year. The site also aims to sell excess power to Argentina’s grid as a way to generate revenue and curb operational redundancies.

governmental Official data shows The annual inflation rate will reach 211% in 2023, the highest in 32 years, further weakening the country’s purchasing power. today, Two out of five Argentines live in poverty.

Ethereum co-founder Vitalik Buterin previously told CNBC that cryptocurrencies have far more use cases in Argentina than in many other parts of the world, noting that he found coffee shops accepting Bitcoin and Ethereum.

“When I visited Argentina at the end of 2021, a lot of people were using cryptocurrencies, a lot of people liked cryptocurrencies. said Buterin sadly. “I’ve actually been recognized on the streets of Buenos Aires more often than I’ve been recognized in San Francisco.”

Argentine President Javier Milley told the World Economic Forum in January that “shock therapy” was the only solution to the deep crisis facing the country. One strategy is to devalue the national currency by 50% to curb inflation. Milley, who took over as president in December, has embraced Bitcoin and proposed dollarizing the economy, as well as abolishing central banks and privatizing the pension system.

“We started this work before Milley came on board,” Lostro said. “I think it’s very interesting that we’re bringing these devices online in the region in sync and in stride because it’s becoming dollarized, becoming more stable and bringing real investment dollars into the economy.”

Federico Brom, director of business development at Exa Tech, said Argentina “basically banned imports” as a way to protect its currency. This may act as a hindrance to the expansion of Bitcoin mining operations.

Still, Brohm said he’s seen “a lot of support, a lot of hype and a lot of interest” from them.