An Arctic Circle Bitcoin Mine Will Heat a Building in a Fishing Village

As a seasoned crypto investor with over two decades of experience under my belt, I’ve witnessed the evolution of this digital gold rush from its infancy to the behemoth it is today. The news of Sazmining setting up a Bitcoin mining site in the Arctic Circle has piqued my interest and raised a few eyebrows among the crypto community.

A bitcoin (BTC) mine is coming to the Arctic Circle.

As a researcher, I’m excited to share that I’m involved with a project involving a 350-square-meter facility, ingeniously devised by the retail-focused bitcoin mining company, Sazmining. This innovative structure is planned to be situated in a quaint fishing village nestled along the Norwegian coastline. Come December 1st, if all goes well, it could very well establish itself as the world’s northernmost mining operation.

Instead of keeping the antiquated oil heater in a large town building, let’s install a Bitcoin-focused data center within the structure, warming it up with the substantial heat generated from the mining equipment.

In this region of the world, heat is an extremely important resource, as Kent Halliburton, CEO of Sazminining, explained to CoinDesk. For much of the year, temperatures drop to a chilling -20 degrees Celsius. Remarkably, some of the heat generated by these machines will be diverted for drying fish, which is an essential part of the local economy.

Halliburton opted to keep secret the precise location of the bitcoin mining facility until its launch, yet he emphasized that the project was intended to demonstrate the potential advantages of bitcoin mining for other Arctic inhabitants.

Halliburton explained, “It’s similar to saying, ‘You have to witness it yourself to truly grasp it.’ This analogy should help the locals realize that while this technology isn’t brand new, it’s been thoroughly tested and is ready for immediate implementation.

“There are multiple business owners in the community already considering this approach,” he added.

How the Arctic bitcoin mine works

As a researcher focusing on mining rigs, I can attest that these machines are engineered for intensive computational tasks, which inevitably generate significant heat. To maintain their optimal performance and longevity, various cooling methods are employed. Some opt for the traditional approach of using fans to dissipate heat, while others immerse the rig in large tubs filled with dielectric fluid, a method that ensures efficient heat transfer and effective cooling.

The Sazmining operation, boasting a total power capacity of 2.6 megawatts, employs an innovative cooling approach. Instead of external cooling systems, they plan to circulate coolant directly through miniature channels within the machines. This system absorbs heat as it runs, and subsequently expels it throughout the building.

The setup presents distinct structural issues, such as the need to avoid producing excessive heat inside the building to ensure comfort for occupants. Interestingly, this means that an air conditioning unit, or a ‘dry cooler,’ must be installed on the rooftop to assist in maintaining a suitable temperature. Halliburton made this point.

But it does come with perks, too. Liquid cooling means the machines will be very quiet and won’t bother anyone in the building. Visitors will be able to see the mining rigs through a plexiglass wall, Halliburton said.

This operation isn’t new to reusing the heat generated by its mining equipment. A spa in Manhattan, too, employs a similar method for heating its swimming pools, and it’s not unusual for individual miners to warm their homes or greenhouses using this approach as well.

Win-win?

Sazmining manages two other mining sites – one located in Wisconsin, U.S., and another in Paraguay. Their business approach allows individual investors to purchase personal mining equipment, after which Sazmining takes care of operation in an eco-friendly manner. In return for this service, they take 15% of the miner’s block rewards as stated on their website.

In simpler terms, Halliburton stated that the Norwegian project wasn’t initially designed as a trial. With the fourth Bitcoin halving making mining extremely competitive (by reducing mining profits by half), this agreement turned out to be a smart financial move for both parties.

He stated that instead of spending money on oil for the boiler, we are essentially being compensated for providing heat to the building. Given Norway’s plentiful hydropower, electricity is quite affordable, making it possible for our mining operation to operate predominantly on renewable energy.

Indeed, Sazmining clients can potentially purchase bitcoin at a cost lower than $54,000 due to their service fee of approximately 0.046 dollars per kilowatt-hour, as stated by Halliburton. To put this into perspective, B Riley Securities estimates that the average power costs within the sector are roughly 0.045 dollars per kilowatt-hour. Currently, bitcoin’s price is hovering around $70,000.

He mentioned, “What we have here is something extra that can be converted into cash. Essentially, we’re employing an electron in the process of mining Bitcoin, yet we could also utilize that same electron to warm up the space. In essence, we are getting two benefits from a single electron.

Yet, it’s unclear whether people across the country share this optimism. Earlier this year, Norwegian legislators initiated measures to limit bitcoin mining, which was a step towards creating a suitable legal structure for various types of data centers.

I, as a minister of energy in Norway, have expressed concerns about Bitcoin mining due to its substantial contribution to greenhouse-gas emissions. This type of business is not aligned with our country’s values and aspirations.

However, Halliburton argues that the Norwegian government is going through a learning phase, while Sazmining’s facility aims to demonstrate the advantages associated with Bitcoin mining.

Halliburton stated that due to our data center heating the building, it would be challenging for legislators to shut it down during winter as it could pose a risk to life given the cold climate. Thus, they don’t anticipate any legislation issues in the future regarding this matter.