Negative Oil Prices Could Hurt Bitcoin Miners Who Use Flared Gas

The few North American bitcoin miners who’ve built their businesses around fossil-fuel extraction are watching the oil markets with more excitement than fear, they say, as oil prices sink to historic lows.

Oil-extraction companies need to reduce gas emissions for environmental reasons. So, instead of flaring off excess gas on site, some bitcoin mining firms – like Upstream Data in Canada, Crusoe Energy in Colorado and DJ Bitwreck in Texas – capture the excess gas to fuel hundreds of bitcoin-mining computers.

The trouble is, if oil market collapse shuts these power sources down then bitcoin miners can’t capture their waste.

When the price of bitcoin drops dramatically, as it did in March, bitcoin mining can quickly become unprofitable. Some mining operations shut down rather than lose money. Only larger, industrial farms can withstand months without profits if the bitcoin price remains low.

Entrepreneurs need to look for cheap power sources – and that’s where oil-abstraction…