Bitcoin is a green energy battery – Bitcoin Magazine
This is an opinion editorial by Mickey Koss, a West Point graduate with a degree in economics. He spent four years in the infantry before transferring to the finance corps.
In a previous article I discussed probabilistic energy systems, how they can negatively impact the grid and how Bitcoin helps solve some of the problems associated with wind and solar energy.
In this article, I want to address the most frustrating criticism I hear all the time: Bitcoin is a waste of energy.
What else are you going to do with it?
The fact is that Bitcoin does not use that much energy. The big minds at Harvard estimate that the Bitcoin network only uses about 0.55% of global electricity production. By comparison, it is estimated that 6-10% of electricity production is lost in transmission and distribution alone.
If Bitcoin used an order of magnitude more energy, it still wouldn’t be a problem. What most people don’t understand is that if you don’t use energy, you lose it, so what the hell are you going to do with it all anyway?
Actual batteries? Good luck with that. California plans to achieve carbon-neutral goals through extensive industrial-scale battery use. This plan directly conflicts with its own goals, necessitating the extraction of millions of tons of raw materials to produce said batteries. Furthermore, the target only allows them to drive about one million homes in four hours. To reach their goal, it will require a battery capacity that exceeds today’s global capacity by five times. There are many batteries.
The fact is that there is currently no good way to store the huge amount of power that goes unused every day. That is, until Bitcoin and bitcoin mining came around.
Bitcoin is the battery
Energy production is an expensive and complicated business. Energy producers must maintain enough capacity to serve not only the most energy-demanding days of the year, but also enough capacity to allow for expected population growth over long periods of time. This means that most companies are operating well below capacity on most days.
Bitcoin mining allows electric utility providers to monetize any unused capacity, releasing only the power to the grid necessary to satisfy demand on a given day. This enables companies to slow down or stop the pace of interest rate increases. It helps companies help those who can least afford a higher energy bill.
Businesses don’t even need to hold bitcoin. The market is fluid; by mining and immediately selling the coins, they can achieve their revenue goals, help secure the network, and help those in lower income groups buffer their monthly budgets. It even contributes to a wider distribution of mined coins because major miners will no longer be single-purpose mining companies or de facto bitcoin ETFs.
With more cash on the balance sheet, the grid operators can also put more money into maintenance and development, making the grid more robust, and dare I say, sustainable, for future generations.
So for those who say Bitcoin uses a lot of energy, who cares? It uses much less than we waste every day. I say they should stop wasting energy and money by leaving capacity idle. Convert the energy into a different type of battery for a more sustainable future. The battery of human time, effort and ingenuity: money.
By using bitcoin mining as a sponge for excess and unused capacity, we can help those who need it most, and we can help a future of abundant and reliable electricity for all.
This is a guest post by Mickey Koss. Opinions expressed are entirely their own and do not necessarily reflect the opinions of BTC Inc. or Bitcoin Magazine.
