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PermianChain Miner: a mining pool aggregator with an integrated digital energy marketplace for crypto-asset miners

07 September 2021

PermianChain Miner, part of the PermianChain platform, offers bitcoin and other cryptocurrency miners access to consistent, low-cost electricity that is generated on site at energy projects, mainly on natural gas production sites. It is an environmental and socially responsible solution to the global energy consumption problem created by bitcoin and other crypto mining activity that also creates value from stranded and flared natural gas. Flaring is thought to represent around US$16 billion [1] of wasted potential profit each year.

The challenge

The crypto sector has a voracious appetite for energy, which it uses for the blockchain calculation process, which is known as crypto or data mining.
This has put the sector under significant environmental pressure, with some vocal private sector crypto detractors making questionable claims, creating fear, uncertainty and doubt (FUD) on bitcoin. At the same time, governments across North America and Europe have been expressing serious concerns about how the sector generates its power.
Bitcoin miners and their operators need to find a way to show that it is using the world’s resources responsibly.

The solution

The oil and gas sector has a readily available solution. Natural gas tends to accompany oil deposits, but it is often flared (burnt away into the atmosphere) or left stranded in the ground, because it would cost too much to build and maintain the infrastructure necessary to get it to a traditional market.
PermianChain has developed a way of harnessing this wasted gas, working with natural gas operators that are converting it into power and offering it for crypto mining. The mining is carried out on site, minimising infrastructure requirements and costs.
PermianChain Miner allows gives crypto miners the opportunity to show how much power they are consuming and prove that it is produced in an environmentally-responsible way.
PermianChain Miner is part of a suite of blockchain-based tools and services that reduces the waste and the environmental impact of oil and gas production and provides crypto miners with access to relatively low-cost, field generated electricity.

How it works

PermianChain Miner works in three main ways:
  1. It works with natural gas producers that are registered on PermianChain Supplier, to tokenize previously stranded or wasted gas and converting it into consistent, low-cost power, electricity (kWh) for crypto mining operations
  2. It lets crypto miners and energy companies trade this tokenised power using the platform’s Digital Energy Currency (DEC). This enables data miners to manage consumption and purchase digitally streamlined, automated electricity for onsite mining farms
  3. It offers an integrated solution for a digital energy financing, using smart contracts to help crypto mining companies make smart offtake-agreements (SOTAs) that work efficiently with energy companies

The technical process

Supplier gathers and uploads documentation on reserves and adds it to a production campaign on the PermianChain platform. Documentation is compressed, encrypted, and saved in decentralized cloud storage.
PermianChain’s experts and advisors (including geologists, petroleum engineers, acquisitions and divestitures consultants) conduct due diligence on each supplier in exchange for an agreed amount of Digital Energy Currency (DEC), PermianChain’s native token.
If at least two experts approve the submission, then proof of submission, proof of approval, and hashes of supplier’s datasets are automatically published to PermianChain’s blockchain explorer using IBM Hyperledger Fabric.
The PermianChain-appointed treasurer unlocks a specified proportion of DEC tokens and makes them available for sale on the PermianChain Miner platform.
The crypto miner buys DEC tokens to secure power from natural gas resources.
Crypto miner then submits a purchase order and sends the order amount to PermianChain’s smart contract, which is then held until the end of the term specified on the contract on behalf of the supplier.
The crypto miner receives access to natural gas power in the form of kWh.
Supplier processes an order to deliver power via on-site power generation. The miner ships mining servers to the supplier for installation in containerized data centres.
Once the mining equipment is up and running, the miner receives an automatic confirmation for the receipt of power.
The confirmation of receipt releases funds to the supplier on a monthly basis for the power consumption of the miner’s mining servers.

The benefits

By offering access to consistent, low-cost, field-generated energy directly from the energy source, PermianChain Miner facilitates innovation in the crypto sector and helps the oil and gas sector to reduce waste and enhance transparency.
PermianChain Miner creates a crypto mining opportunity for crypto investors of all sizes, by allowing them to participate in a growing pool of miners by opening access to industrial-grade mining facilities. By joining PermianChain Miner, miners have the opportunity to stake energy tokens in exchange for energy credits, giving them the opportunity to diversify and optimize rewards.
PermianChain makes this achievable without adding to the administrative burden for oil and gas project leadership teams.
PermianChain Miner is one of the three foundation blocks of the PermianChain platform. Register here to join the pool and stake your energy token today.
Follow these links if you would like information about PermianChain Supplier [LINK] PermianChain Investor [LINK].
About PermianChain
PermianChain is a proprietary technology platform that brings together the crypto-mining and oil and gas sectors. Using a permissioned access blockchain, PermianChain makes it possible to utilise stranded and wasted energy resources, unlocking liquidity and transforming the way that oil and gas projects are funded, produced, bought and sold. Established in 2018, PermianChain Technologies is a pioneer member of the Blockchain Research Institute (BRI) and start-up member of the Petroleum Technology Alliance Canada (PTAC).

[1] Source: World Bank, NOAA, Colorado School of Mines, GGFR Rounded numbers. www.worldbank.org/en/programs/gasflaringreduction#7 .

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PermianChain Technologies is a Toronto-based technology company that is focused on bringing efficiencies of the blockchain to natural resources. Creating value in resource finance and sustainability.

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