In its most basic terms, what is Bitcoin?

Dusek: Cryptocurrency like Bitcoin is an alternative currency that provides anonymity while reducing transaction costs. It’s decentralized and inflation resistant. It has the potential to end poverty anywhere in the world. Politicians hate it and governments fear it.

READ MORE: Supply Chain Prediction: Companies Must Fully Embrace ESG

Ligon: As laid out in the Bitcoin whitepaper by anonymous creator Satoshi Nakamoto, Bitcoin is a decentralized, peer-to-peer version of electronic cash that allows online payments to be sent directly from one party to another without going through a financial institution. Since the launch of Bitcoin in 2009, many other competitor cryptocurrencies have been created, including Ethereum and a slew of others, but Bitcoin remains the most widely adopted and is prized for its pseudonymous transaction capabilities and network security. New Bitcoins are “mined” with specialized computers that race against each other to guess a complex string of numbers. The winner is rewarded with a “block” of Bitcoin, and the process (called the proof-of-work consensus mechanism) is what creates the Bitcoin blockchain and validates the transactions of other users.

Do you think the relationship between oil and gas producers and crypto miners is here to stay? Is it sustainable long-term?

Dusek: Right now, it’s a great relationship, but we’re still in the honeymoon phase. As margins shrink (for a variety of reasons), we’ll see new variants evolve. Just as fracking has changed the way we produce energy; Bitcoin miners will be key to the next generation of energy development.

Ligon: I believe that Bitcoin miners will have the longest relationships with off-grid energy sources and smaller oil and gas producers, but we’re already seeing major producers like ExxonMobil running pilot projects to test the use of flared gas for mining Bitcoin.

Crypto miners sourcing natural gas from oil and gas producers that would otherwise be flared to power their energy-intensive supercomputers and servers seems like a logical partnership with oil companies facing mounting pressure from governments and agencies to reduce their greenhouse gas (GHG) emissions. How is ESG intertwined in this partnership and what role will it play for the two parties going forward?

Dusek: Right now, there’s no such thing as a consumer of 100% renewable energy. You may be paying for it, but it’s just as clean as your neighbor. Until the world uses 100% renewable energy, reduction of GHG emissions is more of a shell game. Producing or acquiring renewable credits is the quickest way to meet standards. That being said, crypto miners do have the potential to be the one exception to the rule.

READ MORE: Top 3 Reasons Why Digital Transformation Is Key To The ‘E’ In ESG

Ligon: While cheap energy is the main driver for Bitcoin miners trying to partner with oil and gas producers, the ESG implications are the reason that we’re seeing these same producers accept them with open arms. There is plenty of proof of concepts that outline potential carbon-neutral crypto mining, Bitcoin mining reducing GHG emissions compared to flaring and venting, and other “greener” options compared to current practices.