The USA can (and should) dedicate more energy to Bitcoin mining

Depending on who you listen to, crypto is a blessing or a curse. Many, like Texas Lieutenant Governor Dan Patrick, have convinced themselves our near future will be marked by a massive growth in energy demand to support Bitcoin mining that may ultimately break the electrical grid. On the other hand, former President Donald Trump has gone from skeptic to calling on the United States to become the “crypto capital of the planet.”

And is he worried about what that means for energy in America? Nope. Here’s what he had to say:

You need tremendous amounts of electricity. You need double the electricity of the entire electricity that we have right now in the United States to dominate, and we’ll get that done. Who would think we can get that done? But we’re going to get it done. We’ll be having power plants built at the sites. We’ll be releasing people from certain ridiculous requirements, and we’ll be using fossil fuel to make electricity because we’re going to have to. We’ll be using nuclear. We’ll be doing it in an environmentally friendly way, but we will be creating so much electricity that you’ll be saying, Please, please, President, we don’t want any more electricity. We can’t stand it. You’ll be begging me, no more electricity, sir, we have enough. We have enough.

And Trump is right. In fact, the United States can — and should — put more energy into Bitcoin mining.

First, claims about crypto’s energy consumption are overblown. Estimates from the US Energy Information Administration peg the electricity consumption from crypto to be between 0.6% and 2.3% in the US. While it’s safe to assume that most of this is Bitcoin, data is not available.

Second, even though Bitcoin mining is energy-intensive, mining activity responds to electricity prices in real-time. There’s little reason to think that Bitcoin is a threat to the electrical grid. The moments policymakers are most worried about are peaking moments when everyone is using electricity at the same time. James McAvity, the CEO of Cormint, recently made a simple point: During these peaks, when prices get high, mining turns down.

We could double, triple, or even 10x Bitcoin mining and still have little concern for the grid at these peak moments. In fact, Bitcoin mining is particularly effective at leveraging its flexibility to manage energy demand. While it is tremendously hard for other businesses to simply turn off the lights when electricity rates are highest, miners do not have that same problem. In fact, in 2023, Bitcoin miners were 97% offline during the 70 most expensive hours in Texas. Bitcoin mining doesn’t have this challenge as miners simply pause until prices fall.

It’s worth noting that at any point in time there will be a fixed supply of electricity generation available. Over time, that isn’t true. We can build more energy resources. And here, the interests of miners and the public overlap. Given the need for electricity, the crypto community has a strong incentive to drive down the costs of energy, and policymakers should see opportunities for collaboration rather than seeing crypto as a threat.

Energy regulators should see Bitcoin mining as an important ally in the way that many renewable energy companies have come to realize. It can bridge the gap for renewables that may be finding it much more difficult and less economically viable to expand. While each marginal solar project becomes harder to justify-especially when it cannot be stored in the battery or utilized on the grid-Bitcoin can make them make sense.

Economic growth, in the long run, is going to take massive amounts of energy. That cannot be denied. And the increasing effort to reindustrialize America will take even more. This is what Trump sees that others do not. Bitcoin mining isn’t the enemy of our electricity grids but a catalyst for its evolution, and it will lay a foundation for decades of economic growth beyond crypto. This is what he means when he says, “Bitcoin and crypto will grow our economy, cement American financial dominance and strengthen our entire country, long into the future.”

It’s time to admit that we cannot achieve energy abundance if we are unwilling to accept crypto’s role in getting us there.

Source: https://cointelegraph.com/news/usa-can-should-put-more-energy-bitcoin-mining