The Economy of Bitcoin Mining, How it Will Tremendously Benefit Renewable Producers, Our Climate, and Might Make You Rich
The problem:
Right now renewable energy sources have a problem, the rate in which they produce energy is sporadic often resulting in major gluts and inconsistent demand. Since the energy cannot be reliably stored, this results in what is called cycling, a plant having to shut down and restart production to suit the surrounding areas demand. Every time a power plant is turned off and on, the boiler, steam lines, turbine, and auxiliary components go through unavoidably large thermal and pressure stresses, which cause damage. This damage is made worse for high temperature components which will eventually start to fail, resulting in shorter component life expectancies which increase costs. If we want renewable energy sources to take market share from fossil fuels we need to find a way to reduce their prices to outcompete.
Bitcoin fixes this?
This is where Bitcoin mining comes in. Bitcoin mining gives renewable energy companies reliable sources of income because Bitcoin mines can set up shop on site and act as buyers of last resort for the excess power generated and have virtually unlimited demand for excess meaning the plant won’t have to cycle or waste which is inefficient and costly. The reliable income from Bitcoin miners and virtually unlimited demand for excess gives power companies MORE money for expansion, R&D , and most importantly lowers costs to the end consumer.
The coming boon:
We have already seen this model working to great effect in Texas. Layer1, the largest US Bitcoin mine utilizing abundant wind energy buys excess power from the local renewable energy producers and mines Bitcoin, in times of high consumer demand in the surrounding areas the Bitcoin mine shuts or slows down, selling the energy it contractually purchased back to the grid acting like an insurance underwriter for producers. A harmony where both interests are met creating a huge boon in Texas renewable producers. Bitcoin miners are flocking to Texas allowing renewable producers to expand, making green energy more abundant. If you are a enterprising individual you would do well for yourself to find a way into this fledgeling market.
Ultimately I predict Bitcoin will have the largest positive effect on renewable energy production, R+D and adoption in the coming decades. Bitcoin will do more for green energy in all forms than any industry, climate protest or politician combined utilizing game theoretic principles to achieve its ends. There are even more unique things happening in the Bitcoin mining world to look into, some Bitcoin mining companies are trapping flare gas that would’ve been exhausted into the atmosphere and using it to mine Bitcoin, for free.
Sources:
https://www.nrel.gov/docs/fy12osti/55433.pdf
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