The next real long-term inflection point in the development of Bitcoin is the question about energy or bitcoin infrastructure.
I can’t help but notice the elongating list of crypto mining companies and energy producers collaborating and the knock-on effects will follow through.
This is highly likely a long-term benefit for the price and stability of bitcoin.
Like many things in corporate America, everything gets professionalized, specialized, corporatized, and if they are lucky, financialized as a product and resold to investors.
The usual result is a higher-priced last-mile product and in this case, it would be the price of one Bitcoin.
In 2021, ExxonMobil reported annual revenue of more than $285 billion with global daily production and is also working with a bitcoin mining company in North Dakota to turn otherwise wasted gas into energy for mining operations.
In August 2021, Exxon was already selling some gas to miners.
ConocoPhillips is also supplying gas to bitcoin miners.
Marathon Oil, a multi-billion-dollar oil company based in Houston, also powers co-located bitcoin mining operations with its gas.
American companies aren’t the only ones making headlines for their bitcoin-and-oil deals though.
Russian oil giant Gazprom has been planning and building its own bitcoin mining venture on its oil drilling sites since late 2020.
Bitcoin mining as an industry gains mainstream legitimacy as more traditional energy companies work with bitcoin miners.
Historically, bitcoin mining hasn’t been developed with institutional money and is mainly mom and pop outfits.
That also means it’s less efficient and less dynamic but has room to grow.
Just a few years ago, the concept of heavyweight names inking contracts with mining companies would be impossible.
Bitcoin mining is an energy infrastructure.
A future where every major oil producer is also a bitcoin miner — or at least operates a bitcoin mining arm — is an idea that has longevity and could become reality soon.
Particularly for the oil and gas industry, bitcoin miners continue to make inroads with more reported deals between these two industries.
The achievements that these partnerships represent would jump-start the crypto winter that has engulfed the crypto industry with many altcoins getting flipped into the dumpster.
The top fossil fuel producers, even if it seems like they are ridiculed by the climate change brigade every second, are incredibly powerful companies and if energy and bitcoin energy infrastructure are inextricably linked, it means bitcoin has staying power.
As many have noticed, fossil fuel companies are masters at milking an industry as they initiate buybacks and dividends in the face of “Putin’s” hyperinflation.
If Bitcoin energy infrastructure is embedded into the industry of the likes of Exxon and company, I believe the price of Bitcoin will be an outsized winner even if the price of oil goes to $200 first.
The overspill of profits could finally find its way into a new business of developing more efficient mining systems and embedding itself as the bulwark of crypto coin creation.
That will mean that fossil fuel companies will be able to throw more capital at developing Bitcoin’s infrastructure as a new standalone business as oil, at some point, retraces from its highs.
