Bitcoin mining can make electricity cheaper in two ways:
- Bitcoin miners can provide demand response services to the electrical grid. Demand response services involve reducing electricity consumption when the grid is under stress. This can help to prevent blackouts and other problems. Bitcoin miners can do this by turning off their mining machines when the grid needs more electricity. This can help to reduce the peak demand on the grid, which can lead to lower electricity prices for everyone.
- Bitcoin miners can help to develop renewable energy sources. Bitcoin miners need a lot of electricity to power their mining machines. This can create a demand for renewable energy sources, such as solar and wind power. This increased demand can lead to lower prices for renewable energy, which can benefit everyone.
For example, in Texas, bitcoin miners are helping to develop a new renewable energy market. The Texas Blockchain Council has worked with the state government to create a program that allows bitcoin miners to sell excess renewable energy back to the grid. This program is helping to make renewable energy more affordable and accessible in Texas.
A recent study by the Cambridge Centre for Alternative Finance found that Bitcoin consumes 113.89 terawatt hours (TWh) per year, while the banking system consumes 263.72 TWh per year. This means that Bitcoin uses about half the energy of the banking system.
There are a few reasons why Bitcoin uses less energy than fiat money. First, Bitcoin is a digital currency, so it does not require the production of physical cash. Second, Bitcoin transactions are processed on a decentralized network, which means that there is no need for a central financial institution to process them. Third, Bitcoin uses a proof-of-work consensus mechanism, which is more energy-efficient than the proof-of-stake consensus mechanism used by some other cryptocurrencies.
Shayne Heffernan
