ELI5 Hydro Mining: generate your own electrical power for cryptocurrency mining

Crypto Bill

7 years ago

Hydro mining is a generic term which refers to the use of hydropower in the cryptocurrency mining process.

Hydro-mining is considered a green energy alternative, which attempts to leverage natural energy sources for the purpose of Bitcoin or altcoin proof of work mining.

As we know, from the concept of PoW, mining can be energy intensive. In fact, energy consumption is the single biggest cost in a mining operation.

There is no shortage of criticism of the Bitcoin mining process due to its large energy expenditure, especially in an age where conservation and environmental concerns are at the top of the agenda everywhere.

Green Energy

Energy reuse, efficient energy usage, green sources of energy are all hot topics in today’s interconnected world. Cryptocurrencies must adapt to this agenda or quickly face mounting criticism and regulation by environmental agencies.

Hydromining fits into this context by leveraging natural running water and gravity-driven water streams as sources of electrical energy, which can be leveraged for cryptocurrency mining.

The excess heat produced by mining hardware can also be reused to heat the water itself and be used for hydroponics and other applications where temperature control is required.

Former startup projects, such as Hydrominer (no longer in business), attempted to offer solutions in this area. Hydrominer, which raised U$ 2.9 million in its ICO, aimed to work with hydropower stations to add mining infrastructure in loco, directly where power is generated from but, unfortunately, the project was shut down in late 2018.

Your Own Power Plant

Users need not wait for startup projects to deploy in order to attempt to build their own hydro power solutions.

If you’ve got moving water available, chances are you can build a micro hydro-power plant without disrupting the habitat or the water source itself.

For instance, the following successful micro hydro power project can produce from 15 to 100 kw of power (!!):

This innovative design does not harm the aquatic wildlife and is able to concentrate even small streams of water into powerful jets capable of generating kilowatts of electrical power for as long as the water stream is running.

This Hydro-power design is developed by Turbulent Hydro, a company from Belgium, which specializes in small DIY electrical turbines that can be deployed on limited water streams.

There are plenty of other cool ideas on Youtube, take for instance the following project which leverages a nice yet small stream of downhill water for power generation via a turbine:

As we can see, generating enough power for a mining rig does not require large amounts of hydro power. Unsuspecting streams of water which aren’t currently being tapped could be repurposed to generate energy for a rig.

Environmental Costs

The environmental costs of such hydro power projects must be carefully assessed.

Make sure to check with local authorities and study the applicable legislation carefully so that your project won’t be subject to sanctions for violating any environmental regulations.

In any such project, the path where fish and other wildlife transit must be kept free, especially during mating season when they tend to swim up stream to lay their eggs at the highest points in the water system.

The path back through the stream must also be clear. Here’s a starting list with some agencies you may contact to get started on your legal research about the applying legislation and environmental impact of your hydromining power project. Here’s a nice overview of the legislation impacting hydro power projects.

Once power is generated, hydro mining is not at all different from regular mains-based mining.

Mining Rig Stability

You will need to take some additional measures to keep your hydromining rig healthy.

Mining profitability depends largely on constancy, not on instantaneous speed.

Rigs with immense hashing power, but which are plagued with constant downtime and connection problems are not profitable. The key to a profitable rig is constancy and good maintenance.

A stable power supply is, therefore, obligatory in order to run a profitable mining operation.

Which means your hydro power source may not be the sole source of power. A scheme can be devised where grid power works as a backup for your hydro generator.

Very fast switching UPS’s are capable of commutation between your hydro generator and mains power without noticeable delay, keeping the rig powered throughout the process.

Good quality PC power supplies also tend to suppress switching spikes.

A battery bank tied to an on-grid inverter can work as a buffer for temporary glitches and power spikes. The added cost of a battery bank can offset your mining profits, but it is a nice additional layer for a green power operation.

Stable Internet Connection

Hydro power also does not change the fact that your internet connection should be stable 24×7.

Even if the hydro-mining rig is running at full steam with a perfect power supply, it won’t be performant if, for some reason, the internet connection is intermittent or unstable.

A bad Internet connection means the hydromining rig will not be profitable either. So, regardless of the power source, make sure a stable internet connection is available 24×7, better still if it’s a dedicated connection just for the mining rig. Keep your personal/professional browsing on a separate connection as to separate the traffic.

Since a lot of hydro power generators will be located outside urban areas, the internet connection issue may become a complication for hydro mining operations. A good rural area internet radio provider should therefore be researched before embarking on the electrical power project per se.

Power supply and Internet connection constancy are just two factors you must consider when approaching a hydro mining project.

Hydrostaking?

So, what’s keeping anyone from using the hydropower for staking instead of Proof of Work mining?

Nothing, in fact!

Running a staking operation using hydropower has the same advantages and almost the same requirements as Proof of Work mining, except it takes a lot less energy than your typical Bitcoin miner.

A Cardano or Avalanche node can be run at a few watts power consumption at full power, so a much smaller generator could be deployed.

As in all staking, hydrostaking would require a good internet connection. In fact, this would be the single greatest difference from a Proof of Work hydromining operation : staking is much more critical when it comes to block times. In Cardano, for example, you have a few milliseconds to pump a block out into the network so you can reach enough nodes before your slot expires.

Conclusion

We hope this short foray into hydro mining has helped clear up the concepts and challenges involved in hydro-powered mining rigs. There is no shortage of ideas when it comes to green cryptocurrency mining operations.

Living completely off-grid is no longer impossible – it can be achieved through several alternative energy sources, of which hydromining is just one.

As with everything else in cryptocurrencies, every new technical development has the potential to become a large success.

Cryptocurrencies themselves are completely new. We have the privilege to be at the forefront of a revolution that demands creativity and various kinds of know-how in order to build neat projects.

Hydro mining is just beginning to trend and there’s ample space for creative solutions using green energy sources to power the future of money.