Jess Summerhill holds a steadfast belief that his technology can alleviate the negative environmental effects of cryptocurrency production. Currently the Chief Technology Officer at Dnar, a company working to make cryptocurrency more accessible to West Africans, Summerhill recently envisioned a new way to mine cryptocurrency that he hopes will push the industry towards a greener future.
As a tech industry professional with over a decade of experience and a science fiction enthusiast, Summerhill felt drawn to the intangible and somewhat mystical concept of cryptocurrency.
He first encountered the world of digital currency in 2016, when a close friend sat him down to watch The Rise and Rise of Bitcoin, a documentary exploring the “social and political impacts of the world’s first global and open-source digital currency.”
Summerhill was enthralled. Soon after, he funneled some savings into the only three cryptocurrencies available on Coinbase at the time: Bitcoin, Litecoin and Ethereum. His timing couldn’t have been better. The following year, in 2017, Bitcoin’s value skyrocketed by over 1,300%, reaching an all-time high.
Excited by the technology’s prospects, he began to explore cryptocurrency mining, eventually collecting enough equipment to build a special computer capable of mining coins for him. But the computer was loud, hot and racked up his electricity bill, attributes Summerhill described as “not ideal for roommates” he was living with at the time.
Ultimately, Summerhill’s frustrations with the available technology combined with his entrepreneurial spirit led him to found Maven Miners in 2020. The startup, based in D.C., is currently working to design a more efficient process of mining cryptocurrency, which they hope can one day run entirely off renewable energy.
“I don’t want to speak prematurely, but when I talk to other people out there … no one is thinking of doing something like this at scale,” Summerhill said. “It has lower costs involved, better long-term investment, better environmental impact; just all around we think it’s the way the industry should go, and we want to spearhead that.”
Summerhill represents a growing number of individuals in the cryptocurrency industry that are grappling with the environmental impacts of mining cryptocurrency and seeking to find the solutions for tomorrow.
While the idea of making the cryptocurrency mining process more environmentally friendly cryptocurrency isn’t wholly original, Summerhill is one of the first to be seriously pursuing it.
Another company, Elite Mining, is further along in the process and claims to be better for the environment by capturing surplus energy from places like orphaned oil wells. The company is also developing more efficient computers that require less energy to mine cryptocurrency.
Ethereum, the second-most popular cryptocurrency, is transitioning to a 2.0 version in 2022 that will dramatically reduce its power consumption and negative environmental impacts.
How cryptocurrencies devour electricity
Cryptocurrency is created through a complex process called mining. In broad strokes, specialized mining computers compete to solve complex math equations that unlock small amounts of new currency. These computers, located around the world, typically operate nonstop and require massive amounts of electricity to stay running and cool.
The mining of Bitcoin requires about 91 terawatt-hours of electricity annually — that’s more than countries like Finland, home to 5.5 million people, use in a year. As of December, validating a single Bitcoin transaction requires approximately 2,004 kilowatt-hours of electricity, enough to power the average U.S. household for nearly 69 days.
Most research studying the environmental impacts of cryptocurrency focus on Bitcoin because it’s the most popular, and consequently energy-intensive, currency, but other coins create similar impacts. One transaction using Ethereum, the world’s second-most popular coin, uses the same electricity as an average U.S. household would in a little under seven days.
James Angel, a professor specializing in financial technology at Georgetown University, said the rising energy needs of cryptocurrencies like Bitcoin are a cause for environmental concern.
“The high price of Bitcoin basically creates a financial incentive for people to mine it,” Angel said. “At $57,000 per Bitcoin, what that means is you have a tremendous financial incentive to go out, buy some mining hardware, and mine it; you’re not really going to care how dirty the electricity is.”
Cryptocurrency mining operations are typically housed in commercial rather than residential facilities due to the heat, noise and electricity required to maintain them. These mass-mining sites can manage hundreds, if not thousands, of computers at a time and most don’t use the majority of their energy from renewable sources.
Cryptocurrency farms were historically located in China, due to an abundance of cheap and dirty energy, but a recent increase in regulations pushed miners to the U.S., where they flooded states like Texas. Wherever miners ground themselves, they tend to prefer fossil fuel-based electricity, given its reputation for low prices and reliability.
Angel said that among the reasons for the cryptocurrency crackdown were concerns about the industry’s rising power consumption in China. As the price of coins rises, so does the number of miners needed to maintain the cryptocurrency network, he said.
The Maven Miners
Jess Summerhill hopes his Maven Miners startup can help the cryptocurrency industry shift away from polluting energy sources.
Hesitant to share many specific details, citing “industry competition,” Summerhill said his startup is in the process of developing a more efficient and renewable kind of mining computer. His ultimate goal is to operate a mining farm in the D.C. area filled with these computers that are powered entirely by renewable energy.
While he said he has attracted some interest from angel investors, Summerhill is far from making his farm a reality. The startup is currently staffed by him and his longtime friend and co-entrepreneur, Will Rossi.
With a background in computer science, Summerhill is focusing on developing the software, while Rossi is developing ways to make computer hardware more reusable. Summerhill and Rossi claim that mining rigs contribute to the industry’s sustainability issue because the computing chips many current models use only mine one token and have to be tossed once they burn out.
“A lot of the times, these boards can be fixed by soldering one chip off and putting a new one on, so we’re going to focus on repair instead of replace,” Rossi said.
Maven Miners also plans to compound its environmental benefits by exclusively mining low power consumption coins like the Basic Attention Token, the duo said.
“We want to stick with the lower power consumption coins because we see it as a no-brainer in the use of the blockchain,” Rossi said. “Using low power consumption coins works really well, and we want to show that there’s a market for it and that it doesn’t have to be a massive power consumer.”
Summerhill said once the pair gets a little further in the research and development phase, they plan to start bringing others on board, but he’s been encouraged to continue pursuing the project by early interest from a number of unspecified angel investors.
No stranger to startups, Summerhill first conceptualized a robotics company in 2015 only to quickly abandon the project after realizing the amount of overhead required.
In 2018, he helped start a blockchain-based game called War Riders, serving as the Chief Technology Officer; however, he left shortly after joining due to “internal conflict” and diverging visions for the company.
But Summerhill thinks this endeavor is different and his confidence is unwavering.
“It needs to pan out. It’s one of those things that if you’re trying to do something important enough … and you know that the risk of failure may be high, you’re going to do it anyway,” Summerhill said.
Inside a cryptocurrency mining facility
Russell Weiss owns and manages Flex Data Center, a 15,256-square-foot colocation company in Reston, Virginia. The data center primarily hosts website servers, cloud systems and other network equipment, renting its space to private and commercial operations alike.
About a third of his clients are private cryptocurrency investors who use his facility to securely store their mining computers. The Flex Data Center opened in 2001 but Weiss said he didn’t see an interest in the use of his facility from cryptocurrency miners until the 2017 Bitcoin boom.
Because the computers are difficult to power and cool at home, the Flex Data Center provides a secure site to do both.
The Flex Data Center is housed in a nondescript gray building, marked only by an army of security cameras and an address pasted in plain white lettering on the glass door. Wedged between a childcare and athletic center, the place is entirely underwhelming from the outside. Yet inside, it is teaming with whirring machines, blinking computers and a heat that envelopes visitors like an electric blanket. Shelves half-filled with mining rigs and ASIC computers fill one of the three rooms at the facility, and black plastic barriers surround the shelves, directing a steady stream of hot air up towards the air conditioning ducts — a practice that facility manager Steve Marish said helps the facility use its energy more efficiently. When the shelves of computers are running at full capacity, temperatures can reach upwards of 100 degrees Fahrenheit, Marish said.
“Some people might try to use these miners to heat their house in the winter because they put off so much heat,” Weiss said. “But during the summer, at least in our area in Northern Virginia, you’re certainly not going to want to be running those in your house.”
The facility uses approximately 500 kilowatts of electricity each month, 120 kilowatts of which come from the mining rigs, Weiss said.
His company has negotiated special electricity rates with Dominion Energy, but he declined to give specifics, citing economic competition with other businesses. While Dominion Energy does draw some energy from renewable sources, Flex Data Center isn’t carbon neutral, Weiss said, primarily because it would cut into the company’s profits.
“Dominion Energy does offer the ability to pay extra and purchase energy offsets, where you’re offsetting carbon emissions,” Weiss explained. “We have opted not to do that, mainly because we are driven by customer demand.” Weiss added that though he’s asked his customers if they would be interested in paying a slightly higher monthly fee for carbon-neutral energy, the large majority of them have said no.
Weiss acknowledged how much power cryptocurrencies require and said that, while the benefits may not outweigh the environmental drawbacks, he believes cryptocurrency mining can be made much more efficient with some time and ingenuity.
Angel, the financial technology professor, agreed that while cryptocurrency technology has a lot of potentials, massive mining operations and cryptocurrency companies need to reconfigure how they consume electricity for the environment’s sake.
“Bitcoin 1.0 is an environmental disaster and must evolve or fade away,” Angel said.