Upstream Sues Crusoe Energy for Bitcoin Mining Patent Violation

The Bitcoin mining realm just got interesting—a Canadian BTC mining corp. Upstream Data Inc. filed a patent infringement lawsuit against Crusoe Energy System LLC. The lawsuit alleges that Crusoe infringed Upstream’s patent concerning their Bitcoin mining technology. That is used to convert stranded natural gas in mines to Bitcoin.

Upstream Data Inc. Sues Crusoe Energy Systems LLC

The plaintiff filed the lawsuit in the United States District Court for the District of Colorado. Per the complaint, Upstream holds the patent for the system that powers a Bitcoin mining facility. It uses stranded natural gas to generate electricity for crypto mining.

The filing also states that the company has already deployed over 350 Bitcoin mining facilities across the United States and Canada, addressing the issue of stranded gas venting and flaring.

Crusoe manufactures and operates cryptocurrency mining facilities powered by stranded natural gas resources. The plaintiff has accused the company of competing in the arena by selling and working on a similar modus operandi. They are charging their “Digital Flare Mitigation System” as an infringement of Upstream’s patented technology.

The lawsuit also argues that the defendant was aware of the patent while their product was developing.

It also highlights instances where Crusoe identified Upstream as an able competitor in its blog posts and claims made in patent applications. The suit seeks damages and injunctive relief against the defendant for patent infringement.

Upstream argued that the defendant’s actions caused harm to its business by infringing the patent rights and creating unhealthy competition in the market. The case is scheduled to be heard in the U.S. District Court for the District of Colorado, where Crusoe operates.

How is Natural Gas Used for Bitcoin Mining?

Natural gas is a byproduct of oil drilling. Harnessing this gas for consumption is only sometimes economically viable. Hence the producers burn the gas on-site, which can be seen as colossal fire flares, and the activity is also called flaring. Gas flaring creates heavy emissions without any utility. It also releases much higher methane compared to using it for producing electricity.

Bitcoin mining requires enormous amounts of electricity, and this industry can reduce flaring. As transporting this gas to off-site locations is tedious, a BTC mining facility operating on-site can solve the issue. The flared gas can be pumped into a system to produce electricity, which can then be used to power mining rigs.

Crusoe Energy’s trademark Digital Flare Mitigation Technology combusts 99.89% of methane, compared to around 93% while flaring. Also, this process reduces CO2 emission by approximately 63% and prevents methane leaks.

Numbers show that replacing gas flaring with Bitcoin mining could be the most powerful way to reduce greenhouse gas emissions. The per megawatt capacity of the BTC mining facility on site can reduce the yearly emission of 9,482 tons of CO2, compared to 1,917 for wind-powered and 1,278 for solar-powered facilities.

Moreover, the oil-field Bitcoin mining facilities could outperform the traditional grid-connected facilities by offsetting their energy consumption. However, Crusoe’s premise seems promising, but the recent lawsuit against the company will decide its future.