Are your tenants mining bitcoins?

Image by flickr user whitez

Unless you monitor your buildings use, you have no way of knowing

You might have heard of the alternative currency bitcoin, a trendy alternative currency embraced by libertarians, Silicon Valley venture capitalists, and Ashton Kutcher (arguably a stand-in for all three). You might not have stopped to consider how bitcoins are created. If your buildings provide free electricity, take a closer look and examine a unique case of cost allocation.

One reason bitcoin generates excitement is its decentralized method of limiting the supply of new bitcoins, in contrast with government-backed currencies whose supply fluctuates with the politics of the day. Bitcoins aren’t printed, they are “mined” in a deliberately expensive way. Bitcoin miners use computers to solve increasingly complex problems and are rewarded with bitcoins upon finding solutions.

Predictably this uses massive amounts of electricity.

Estimates vary, but Forbes puts it at $15M of electricity a day! Devices are getting built to do nothing other than bitcoin mining, such as this $330 ASIC based box from Amazon (which consumes a massive 240 watts). While some bitcoin miners have specialized facilities, much of the hardware market seems targeted at hobbyists. And hobbyists have discovered that power is a major factor in their profitability — currently about 20% of bitcoin revenues are consumed by energy expenses.

Which brings us to the punchline. Want free electricity? Just bring your bitcoin mining devices into your existing office space. Plug load is very rarely submetered, and unless your building is a Gridium Snapmeter client, they’ll never notice an extra 10 kW of load. The extra energy costs get spread over the other tenants, which in a big building means you get subsidized by the inverse proportion of your rent.

Stop for a moment and consider how you feel about a tenant starting a bitcoin mining operation in their space. It seems wrong; like they are stealing from you and other tenants.

If this scenario seems outlandish, now consider a high-tech client that loads their space up with servers. Do you feel the same? Should owners and other tenants subsidize their energy costs as well?

About Tom Arnold

Tom Arnold is co-founder and CEO of Gridium. Prior to Gridium, Tom Arnold was the Vice President of Energy Efficiency at EnerNOC, and cofounder at TerraPass. Tom has an MBA from the Wharton School of Business at the University of Pennsylvania and a BA in Economics from Dartmouth College. When he isn't thinking about the future of buildings, he enjoys riding his bike and chasing after his two daughters.

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