The House Hearing on Crypto’s Energy Use and Impact, held on January 20, 2023, was ultimately backed by a stellar defense of Bitcoin’s energy use by Brian Brookswith a particularly enlightening testimony from a John Belizaire, founder of Soluna Computing. Belizaire and Brooks both presented concrete examples of how Bitcoin mining is used today to not only provide flexible income to utility providers and power generators, but also to ensure the stability of said networks. . This is accomplished by mine operators entering into agreements with these energy providers to shut down mining operations during times of high demand. I covered these points in April 2021 with my Bitcoin Magazine debut here.
The relationship between energy utilities and miners does not end there. Mining operations also end up providing a level of strength and resilience to power grids by allowing them to operate at near maximum capacity with an opportunity for monetization during times of off-peak demand. This “new” revenue stream can allow providers to: build capital (strengthen balance sheets), spend funds on upgrading and improving services/equipment, expanding services, or may -be to increase compensation/benefits for their employees. Ultimately, it doesn’t matter how these new revenues are allocated or spent; the important point is that mining helps strengthen power grids.
I tip my hat to these two gentlemen, bravo!
More fuel for Belizaire’s testimony comes from Nic Carter’s “On The Brink” podcast, released just hours before the January 20 hearing. Carter sat down with Daniel Roberts, co-founder and co-CEO of Iris Energy, to discuss bitcoin mining and mining sustainability. Roberts goes on to explain how Iris’ approach to bitcoin mining is to look for opportunities where she can provide social good – solving problems for a community in mining areas (AO for short) like those of Great American Mining, which targets gas-flaring operations. Roberts mentions a particular AO in British Columbia, Canada, around a community that had found itself with a large gap between energy demand and production. This discrepancy was caused by a pulp and paper mill going out of business – a common result of technological progress. When this factory was no longer returned, this old demand for energy disappeared, resulting in a supply greater than the demand provided by the community alone. To cover the delta, this resulted in increased energy costs.
By entering this community, bitcoin mining has filled this gap in energy demand and (in my opinion, more importantly) brought a flexible source of demand. Much of the business operations and operating agreements of many miners include considerations for rotating power distribution based on grid demand. Meaning: if there are scenarios where more power is required for the grid (like outlier weather conditions or emergency scenarios), miners give utility providers the ability to redirect power according to needs for community sustainability and resilience.
Hats off to our bitcoin miners.
My favorite part: These mining operations are incentivizing more energy production, which is an absolute necessity if we are to continue on the path to improving our Kardashev rating.
This is a guest post by Mike Hobart. The opinions expressed are entirely their own and do not necessarily reflect those of BTC, Inc. or Bitcoin Magazine.