Monroy highlights cryptomining using waste gas from hydrocarbon fields to generate currencies like Bitcoin, based on a pilot project in Bolivia. The proposal was presented during the first edition of the “Bolivia Blockchain Summit 2024.”
ISSUE 134 | 2024
Raúl Serrano
During the first edition of the “Bolivia Blockchain Summit 2024,” Diego Monroy, Sales Engineer at Luka Industries LLC, delivered an innovative presentation on cryptomining using waste gas, or flare gas, to generate cryptocurrencies like Bitcoin.
His presentation was based on the success of a project implemented in Texas last year and explored its replicability in Bolivia, specifically at a well in Warnes, in the department of Santa Cruz.
Monroy began by recalling an introduction to the topic at a previous event, also organized by ENERGÍABolivia, titled “Energy Dinner 2024” in April this year. He highlighted that this new presentation demonstrates the business model with the financial backing of the project, showcasing its potential for small-scale replication in Bolivia. The main goal is to use waste gas from “Gas Flaring” practices, which would otherwise be wasted, to power generators that energize Bitcoin mining equipment, replicating the business model already implemented in Texas.
As context, Monroy explained the concept of Tokenization, comparing it to the Gold Standard system that governed dollar issuance backed by gold in the United States before 1971. He used this concept to differentiate between a Stablecoin and Bitcoin, noting the high volatility of Bitcoin, which saw a 123% fluctuation over the past year, from $24,900 to a peak of $73,826, compared to Stablecoins like USDC and USDT, which had a fluctuation of only 0.01%, maintaining a one-to-one parity with the physical dollar.
“…Monroy demonstrated how waste gas, traditionally a source of pollution and an example of energy waste, could become a source of income…”
FROM FLARE GAS TO DIGITAL GOLD
A key aspect of his presentation was highlighting the environmental impact of flare gas in the oil industry and the global energy waste caused by this practice. Monroy explained that flaring is a common industry practice implemented for safety protocols in pressure relief systems of processing plants and as an environmental mitigation strategy. It is considered less harmful to release CO2 into the atmosphere than methane, a far more damaging greenhouse gas. He also noted that according to World Bank data, 148 billion cubic meters of gas were burned worldwide in 2023, an alarming figure equivalent to 10 years of Bolivia’s gas production. “This burned gas generates significant pollution, equivalent to 350 million tons of CO2 per year,” he said.
Monroy emphasized that this wasted gas could be harnessed to generate electricity in remote areas, where building transmission infrastructure would be unfeasible. Instead of simply burning the gas, he proposed using it to generate electricity in remote areas to power containers filled with Bitcoin mining computers. This solution would not only reduce the carbon footprint but also utilize an underused energy source to generate income. In Bolivia, this would inject USDTS into the financial system once these Bitcoins are converted into the currency via digital exchange platforms like Binance.
Regarding the economic viability of the project, Monroy presented a detailed analysis of the costs and benefits of Bitcoin cryptomining with flare gas. In the case of the Warnes well, which burns approximately 207,000 cubic meters of gas per year, he stated that CO2 emissions could be significantly reduced through a more efficient combustion process in electric generators. Additionally, he mentioned that the project would generate additional revenue through the sale of carbon credits, which are attractive to companies looking to offset their emissions, such as airlines.
A TIMELY OPPORTUNIT
Monroy concluded by noting that this is a timely moment to invest in Bitcoin mining infrastructure, given that the cost of equipment has decreased due to the current low hashprice, which is the rate at which Bitcoin miners are compensated for their installed computing capacity. “With the expectation that the market will recover, based on the technical analysis of Bitcoin’s market behavior over time, investors could see high returns in the medium term,” he stated, highlighting that the history of cryptocurrency markets is cyclical, making it likely that hashprice values will rise again in the coming months, making the investment even more profitable.
In summary, Diego Monroy’s presentation at the “Bolivia Blockchain Summit 2024” offered a disruptive and visionary proposal for Bolivia. By combining cryptomining with energy sustainability, Monroy demonstrated how waste gas, traditionally a source of pollution and an example of energy waste, could become a source of income and economic growth through Bitcoin mining and the sale of carbon credits.
