What Bitcoin Innovation Could Mean for New Zealand

Bitcoin is a peer-to-peer digital money that launched in 2009. Over the last 15 years Bitcoin has continued to increase in value and gain widespread legal clarity, usage, and institutional recognition, including inclusion in Kiwisaver funds and becoming legal tender in El Salvador and the Swiss municipality of Lugano.

Besides its monetary properties Bitcoin is also a digital technology and a transformative opportunity for New Zealand in the same vein as the rollout of fibre internet and 5G.

There are a number of New Zealand Bitcoin businesses and initiatives along with a growing community focussed on education and building upon this new technology.

LightningPay is a Queenstown-based Bitcoin exchange focussed on creating payment solutions for businesses using the open-source architecture of Bitcoin’s Lightning payment protocol. Their unique point of sale system aims to disrupt the Visa and EFTPOS card networks and do away with the high transaction fees New Zealand consumers and businesses are faced with when paying by card, while also helping reduce the chargeback risk.

Investment in physical infrastructure is another big draw card for Bitcoin in New Zealand. 

The generation of Bitcoin uses electrical energy through a mathematical process analogous to digging up gold for minting gold coins – but digitally, hence the name Bitcoin mining.

Grid Share is a kiwi company operating a renewable and sustainable Bitcoin mining facility located at the Lake Monowai Power Station in Southland. Due to the unique way Bitcoin mining works, the facility is able to switch off and on quickly, a function known as “Demand Response”, using Grid Share’s proprietary technology. 

Demand Response is able to release power back into the grid during peak periods to maintain frequency and voltage in the network and is a perfect plug-in to provide the flexibility required to support renewable energy growth in New Zealand.

Homegrown Bitcoin mining could become an export industry in its own right, selling sustainably mined Bitcoins on the global market alongside New Zealand’s traditional image of agriculture and tourism.

Other unique ideas are being explored in New Zealand, including using the low-grade heat generated from Bitcoin mining facilities for heating covered crops, water, and other industrial applications.

There is an opportunity for Iwi and other organisations to become involved in Bitcoin mining to help monetise isolated geothermal, wind, and solar resources. Bitcoin mining can be located anywhere but the cost of electricity is the primary concern. This means miners are buyers of last resort, but they can also be the first to come online while new generation assets wait to be connected to the grid: the perfect customer for providing a return on investment case for building new energy projects.

There are no significant barriers to New Zealand’s grass roots adoption of Bitcoin. The country’s small size, innovative population, and relatively transparent regulatory processes means there is a chance to become a global leader in the building of technology, businesses, and infrastructure on top of Bitcoin.