Stronghold Digital Mining Inc., an ESG-focused Bitcoin mining firm, has announced a $105 million raise as part of two private placements of equity securities. Investors that participated include MG Capital and “several family offices,” according to a spokesperson.
Stronghold’s primary facility, the Scrubgrass Generating Plant in Pennsylvania, converts waste coal into power which is then used to mine Bitcoin and other cryptocurrencies.
Waste coal—otherwise known as coal refuse—is the material that is left over from traditional coal mining. Other than being an eyesore, waste coal has significant environmental consequences including the leakage of harmful residues into nearby waterways or drainage systems.
However, waste coal can also be harnessed for energy. And Bill Spence, co-chairman of Stronghold, believes this is a positive environmental win for the crypto industry.
“We employ 21st-century crypto mining techniques to remediate the impacts of 19th or 20th-century coal mining in some of the most environmentally neglected regions of the United States,” he said.
Greg Beard, co-chairman of Stronghold, added that the Scrubgrass Plant, combined with the company’s environmental strategy, allows the company to mine Bitcoin while making a “transformational contribution to the environment.”
Stronghold expects to have over 28,000 cryptocurrency miners operating by the end of 2021 and is currently in negotiations to acquire additional facilities with over 200 megawatts of power capacity.
Bitcoin mining and the environment
Bitcoin mining consumes an immense amount of energy.
According to Cambridge University, the entire Bitcoin network currently consumes approximately 85 terawatt-hours (TWh) of energy per year. In terms of annual energy consumption, this places the Bitcoin network above the majority of the world’s countries.
Per a September 2020 study (also conducted by Cambridge University), only 39% of the Bitcoin network is powered by renewable energy.
Previous reporting by Decrypt has shown that the carbon footprint of the non-renewable energy sector of Bitcoin mining (almost two-thirds by current estimates) has previously reached levels equivalent to 61 billion pounds of burned coal.
Despite the environmental concerns surrounding Bitcoin mining, Stronghold claims—by burning waste coal—that the company’s technology removes approximately 90% of emissions.
According to a presentation from Western Pennsylvania Coalition for Abandoned Mine Reclamation shared with Decrypt, coal refuse can “now be economically burned because of advanced technology.”
Economically does not necessarily mean better for the environment, however; the burning of waste coal still creates environmental toxins. According to the Energy Justice Network project, 85 tons of toxic waste ash is created per every 100 tons of coal waste burned.
And with the fresh funding, Stronghold will continue to contribute to this figure. For better or worse.