Bitcoin Mining: How to Turn the World into Electricity

In many parts of the world, access to electricity is a luxury we often take for granted. For example, sub-Saharan Africa (SSA) is facing severe electricity shortages, with over 600 million people without electricity. These deficits lead to economic stagnation, reduced food production, poverty, and even civil unrest. The correlation between access to electricity and economic growth is undeniable, and regions with less than 80% electrification continue to suffer from declining GDP per capita. The challenge is expanding electricity infrastructure to these underserved areas. This is capital intensive and often financially unfeasible for governments with limited resources. This is where Bitcoin mining has a potential solution that could provide a route to providing electricity to areas that have long had no access to electricity.

Bitcoin mining has long been the subject of much controversy, with critics often focusing on its environmental impact. But behind the sensational headlines and mainstream media coverage lies a story of potential humanitarian benefits and energy innovation. By harnessing energy stranded in remote locations, Bitcoin mining can provide a revenue stream for new power plants and support the construction of power grids.

Despite ongoing campaigns against Bitcoin mining, knowledge about the importance of utilizing isolated energy for Bitcoin mining is slowly gaining traction. In fact, this is a story beautifully captured in a newly released, award-winning documentary. Stranded: Dirty Coin Short by Alana Mediaviala Diazshows how Bitcoin miners in places like SSA are creatively recycling stranded power, bringing Bitcoin and forgotten power infrastructure to life.

In this article, we look at the overlooked positive aspects of Bitcoin mining, compare the energy consumption of Bitcoin mining to other industries, and discuss how Bitcoin mining can potentially lead to the discovery of new energy sources and the creation of new energy infrastructure. We will make an example of how we can encourage this.

What is Stranded Energy?

Stranded energy refers to energy sources that exist in a specific location but are not effectively utilized or exploited for production purposes. Essentially, it is energy that becomes stranded or “stranded” in a particular location for a variety of reasons, including a lack of infrastructure for transportation or a mismatch between where energy is produced and where it is demanded.

For example, when new power grids are developed, especially in remote areas, energy infrastructure may be in place before demand can catch up. This means that by the time consumers connect to the grid, the energy generated is more than what is immediately needed, becoming “stranded” and ultimately wasted until more users connect. This is a big problem that Bitcoin mining can help solve, and this area in particular is one of the key benefits of mining, which Stranded has explored in great detail.

In the interview, Alana highlights how by monetizing excess energy in areas where traditional demand is lacking, Bitcoin mining can act as a financial catalyst for building critical grid infrastructure, transforming lives and challenging our perceptions of the social impact of energy. I did. She elaborated on this as follows:The concept of how the grid grows through demand has never occurred to me. In the film, I wanted to capture the fact that having access to electricity is an incredible privilege, and that mining can help finance new grid infrastructure in places that never have before.”

Take Ethiopia, for example. It has the potential to generate more than 60,000 MW of electricity from “renewable” energy sources, but its current installed capacity is only 4,500 MW. 90% of electricity is produced from hydroelectric power, followed by geothermal, solar and wind power. However, the country still suffers from severe energy shortages, with only 44% of its 110 million people having access to electricity. With projects such as the under-construction Grand Ethiopian Renaissance Dam (GERD), which is expected to produce an additional 5,150 MW, the government expects to have a total installed capacity of 17,000 MW over the next decade. The introduction of Bitcoin mining has the potential to fund these power infrastructure projects.

Resolving misunderstandings about Bitcoin mining

One of the most common misconceptions associated with Bitcoin mining is the notion that it consumes massive amounts of energy, exceeding the energy consumption of entire countries. Critics often point to reports that Bitcoin mining consumes more electricity than many countries, including Ireland, Nigeria, and Uruguay. The Bitcoin Energy Consumption Index from cryptocurrency platform Digiconomist estimates annual energy usage at 33 terawatts, equivalent to a country like Denmark.

However, it is important to analyze these criticisms and place them in the broader context of energy consumption. While it is true that the Bitcoin network’s energy usage appears to be significant, it is important to remember that energy consumption itself is not inherently bad. These criticisms tend to assume that energy is a finite resource and that allocating it to Bitcoin mining deprives other industries and individuals of this valuable commodity.

In reality, energy is an essential and scalable resource, and the notion that one use is more or less wasteful than another is subjective. All users, including Bitcoin miners, bear the costs and pay the full market rate for the electricity they consume. It is a mistake to single out Bitcoin mining for energy consumption while overlooking other industries. As Alana also pointed out, “People often see common misconceptions about what the media often repeats about Bitcoin. No one thinks about the energy consumption of the industries we interact with every day. “These are not common numbers that people are aware of, but for Bitcoin, it definitely gets dirtier with all the energy consumption!”

Compare Bitcoin to other energy-intensive industries

To put things in perspective, let’s compare Bitcoin mining to other energy-intensive sectors that often don’t receive similar scrutiny.

I don’t know about you, but I can’t remember the last time I heard complaints about the high energy consumption of the paper and pulp industry in the media. Combating the myths surrounding the “risks” of Bitcoin mining and energy use requires a nuanced understanding of energy consumption. While it is important to examine the environmental impact of all industries, targeting only Bitcoin mining for criticism and overlooking other energy-intensive sectors is a flawed approach.

What will the future hold?

Unlike any technology before it, Bitcoin mining encourages finding cost-effective ways to utilize energy regardless of geographic limitations or existing energy constraints. These financial drivers could spark an energy revolution on a scale not seen since the Industrial Revolution, potentially turning humanity into a Type I civilization. When asked about her next film project, Alana said: “Here’s a look at what it takes to reach a Type 1 civilization, using Puerto Rico, which is undergoing major infrastructure changes, as an underdog model. “This is a pivotal moment in the island’s history and could serve as an example for broken power grids around the world.”

Convergence is occurring as economic incentives allow Bitcoin mining to saturate the energy sector. Energy producers are monetizing surplus and stranded energy through Bitcoin mining, and miners are vertically integrating to become more competitive. In the near future, the most efficient miners will become energy producers, potentially upending the traditional power grid model.

This is a guest post by Kudzai Kutukwa. The opinions expressed are solely personal and do not necessarily reflect the opinions of BTC Inc or Bitcoin Magazine.