Sazmining is setting up a bitcoin (BTC) mining site in northern Norway that will heat a large building in a fishing village.
The firm’s CEO, Kent Halliburton, told CoinDesk that other local businesses might spin up similar facilities.
The miner doesn’t foresee regulatory scrutiny, despite the country’s previous restrictions on bitcoin mining.
A bitcoin (BTC) mine is coming to the Arctic Circle.
The 350-square-meter facility, conceived by retail-oriented bitcoin mining firm Sazmining, will be located in a small fishing village on the coast of Norway. Once it goes live on Dec. 1, it may well become the northernmost mining operation in the world.
The big idea? To remove the old oil boiler used by one of the town’s largest buildings, replace it with an in-house bitcoin-centric data center and warm the edifice using the tremendous heat produced by the mining rigs.
“Heat is a really critical resource in this region of the world,” Kent Halliburton, the CEO of Sazmining, told CoinDesk in an interview. “It’s minus 20 degrees Celsius for large portions of the year. … A portion of the heat [from the machines] is actually going to be shunted off to dry fish, which is part of the economy there.”
While Halliburton did not wish to publicize the facility’s exact location before it went live, he said the project aimed to showcase the possibilities offered by bitcoin mining to other Arctic residents.
“For the locals, it’s kind of like, you need to see it to believe it,” Halliburton said. “This will be helpful for them to understand that it’s not bleeding edge technology, but it’s pretty tested and it can be deployed now.”
“There are multiple business owners in the community already considering this approach,” he added.
How the Arctic bitcoin mine works
Mining rigs are designed to perform intense computational processes, and they get quite hot. There are a few ways to cool them down, such as with fans or by immersing them in big tubs of dielectric fluid.
Sazmining’s operation – which will have 2.6 megawatts (MW) of total energy capacity – will use a different method: running coolant into the machines themselves through small channels that absorb the heat, then extract it and push it out to the rest of the building.
The set-up comes with unique infrastructural challenges. For example, the firm needs to make sure not to generate too much heat and make people in the building uncomfortable, Halliburton said, which is why the miner, quite paradoxically, had to also install a dry cooler on top of the building to help regulate the temperature.
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.
It’s not the first operation looking to recycle the heat produced by its own mining machines. There’s a spa in Manhattan that uses a similar process for its swimming pools, and it’s not unheard of for solo miners to warm up their apartments or greenhouses this way, either.
Win-win?
Sazmining has two other mining locations: one in the U.S. state of Wisconsin and another in Paraguay. The firm’s business model involves allowing retail investors to buy their own mining rigs and let Sazmining operate them in a carbon-neutral fashion for a 15% share of one’s block rewards, according to the company’s website.
The Norwegian project wasn’t really conceived as an experiment, Halliburton said. Mining has become incredibly competitive in the wake of the fourth Bitcoin halving (which cut mining profitability by 50%), and the deal simply made economic sense for both parties involved.
“The building is paying us for the heat instead of having to pay for oil for the boiler,” he said. Norway’s abundance of hydropower means that electricity is very cheap, and that the mining operation will be running almost completely on green energy.
In fact, with a service fee of $0.046 per kilowatt hour, Sazmining clients should be able to acquire bitcoin for less than $54,000, Halliburton said. For comparison, B Riley Securities recently said that the estimated average power costs for the sector is around $0.045 per kilowatt-hour. (Bitcoin’s price is currently just below $70,000.)
“There’s just this excess thing that we can turn into money,” he said. “Basically, we’re using an electron to hash [mine bitcoin], but we can use that same electron to heat the place. You get two uses for the same electron.”
However, it remains to be seen if everyone else in the nation feels as positive about it. Norwegian lawmakers moved earlier this year to put restrictions on bitcoin mining as part of an effort to provide a proper regulatory framework for data centers of all kinds.
Bitcoin mining “is associated with large greenhouse-gas emissions and is an example of a type of business we do not want in Norway,” Terje Aasland, the country’s minister of energy, reportedly said.
But Halliburton says the Norwegian government is simply undergoing an education process, and Sazmining’s facility is meant to help showcase the benefits of bitcoin mining.
“Because our data center is heating the building, it would be very hard for legislators to justify turning it off since it would jeopardize life in such a cold client during the winter months, so no, we do not see legislation being a problem in the future,” Halliburton said.