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The Bitcoin mining paradox

The impact of Bitcoin mining

During the last five years, the narrative about the Bitcoin mining sector has incredibly shifted from being a terrible industry that was about to consume all energy production of the world and was at the brink of boiling the extinction of the oceans all over the earth, to become a new technological miracle that will boost the creation of brand new generation power plants and balance the existing energy grids around the globe, unlocking an incredible new world of abundance, and even boosting the interplanetary exploration!

How could we go from such a dark scenario to a bright future in that little time?

The causes of such a shift are several and diverse. Still, perhaps the most important is the ignorance and lack of technical expertise of those who made the first such forecasts and the excess of optimism of some exacerbated technologists today.

Without any knowledge about the dynamics of the mining industry, some journalists began to comment on the implications of Bitcoin’s energy consumption, making completely wrong calculations and extrapolations that led some of them to predict that by 2020 mining would consume practically all the energy on the planet! Time proved not only that these predictions were wrong but also that even though the processing capacity of the network has notably increased, its global power consumption does not even reach 0.1% of the total energy generated in the world for all services.

Every other electricity-intensive industry, such as aluminum, outperforms Bitcoin mining annually by several orders of magnitude in energy consumption. And if we focus on the industrial-military complex’s energy use, the numbers fly out to the sky. So we can conclude today that the notion that Bitcoin would consume all available energy was an absolute fallacy very far from reality.

How did we get to the idea taking shape this last year that large-scale mining facilities can be very beneficial for energy generation and distribution systems?

This notion began to gain strength when some electrical engineers and experts in energy management and distribution began to internalize the unique characteristics that large mining operations present in terms of power demand and activation and shutdown times.

Given that power generation plants require for their regular operation a load as stable as possible and being the dynamics of home and industrial consumption too variable, they found in Bitcoin miners the ideal consumer since they require a stable energy supply 24 hours a day, 365 days a year.

Additionally, miners can act as load balancers, turning their equipment on or off instantly according to the fluctuating dynamic of both generation and demand, thus becoming the holy grail of grid balance. Something that no one would have imagined just a couple of years ago.

“Bitcoin miners are the ideal client for energy generators and distributors”

Bold technologists are already predicting that power plants will set up their own mining operations, allowing them to drastically stabilize networks while monetizing low power consumption periods like never before.

Going a little further into the future, it is very likely that alternative energy generation ventures such as wind and solar will receive a tremendous boost thanks to investments from mining companies urgent for more energy sources at the lowest possible cost. This would impulse the creation of new sources of clean and sustainable energy.

Some futurists predict that given the characteristics of the transmission of new blocks through space, it would not be feasible to establish mining colonies on other planets since the Bitcoin time-chain on earth could not be synchronized from far into space, which would generate the necessary incentives to start a new blockchain from scratch in another world!

Surely the future will surprise us with something different from what we imagine today, just as no one could predict Bitcoin just a few decades ago. But we are definitely facing the most important discovery in the history of humankind — Bitcoin.

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