Bitcoin mining companies work with electricity providers to find power solutions that support mining and community access to electricity.
Bitcoin mining specialists gathered to discuss how mining companies can work with local grids to boost power generation and distribution at the Bitcoin 2022 conference in a panel titled “Building new networks.
The panel was moderated by Zack Voell. Panelists included Paul Prager, who is the CEO of Terawulf; Sergii Gerasymovych, Founder and CEO of EZ Blockchain; Zachary K. Bradford, CEO of CleanSpark; and Harry Sudock, Vice President of Strategy for GRIID.
The panelists began the discussion by defining the network and operation of electricity generation and distribution. Sudock explained the different parts. Energy is generated when “the turbine spins. There are many ways to spin the turbine, but that’s what creates the energy. Then it’s moved. Then it’s delivered.”
Prager developed this idea: “The network is essentially what connects demand to load. Where there are imbalances is where there are great opportunities for miners.”
After the explanation of the grids, the group explained how Bitcoin fits into the energy distribution chart. Bradford used an oft-repeated analogy comparing bitcoin to a battery. “As we’ve been exposed to bitcoin, we’ve always talked about storing value, but that’s really what we’re doing, we’re storing energy value in bitcoin. Instead of storing that energy in a battery, we store it in bitcoin by mining.”
Bitcoin mining is effective in strengthening the network due to the constant use of energy and the ease with which miners can plug and unplug their operations. Bradford said, “We can consume a very flat load all the time and we can drop it off almost immediately and then turn it back on.”
Moreover, “We [miners] can interact in a way that improves the health of the network.”
How bitcoin miners will strengthen the grid relates specifically to how they buy electricity from the grid. Sudock explains: “We have reinvented the way electricity is purchased. We want to spend more money on electricity each month, because each unit of income is directly correlated to each unit of electricity.”
Bradford explained the network issues when he shared, “The age of our network is an issue and someone has to pay for it. I think bitcoin miners are in a good position to improve the network across this country. .”
Bitcoin mining offers companies a new way to enter into power purchase agreements with electricity providers. Sudock said, “It’s fundamentally an innovative approach to energy consumption for the first time in the last 90 years.”
Power companies didn’t always understand the incentive to do deals with bitcoin miners, but now, “education has taken place and things have progressed very well, but no one knows how to assess so many power and as much consistency from a charge,” says Bradford.
Sudock chimed in, “There’s nothing more exciting than an economic incentive! He continued: “The overall tariff structure regime and how energy is priced and sold; this is the next step in the process.
Bradford echoed how bitcoin miners have evolved in the eyes of power companies: “Over the past couple of years, bitcoin miners have come to be seen as very good anchor tenants for mining deals. large-scale purchase of electricity.”
Bitcoin mining being tethered to networks presents potential counterparty risk. The panelists then discussed their various concerns regarding the potential risk. Prager embraced the likelihood of government regulation, “I think the [mining] the business will evolve to the highest level of capital efficiency and energy efficiency.”
Likewise, Gerasymovych is also not worried about regulations.
“I think that’s what’s good about bitcoin,” he said. “We can go anywhere. Don’t you like us? We’ll go somewhere else. He added, “It’s a resurrection of energy in general. We’re resurrecting energy where it died.
Prager shared the benefits of bitcoin mining for communities.
“We now have union families back to mine bitcoin and fix miners.” He believes zero carbon will be the next evolution in mining. “I think there will be a big explosion in that direction.”
Sudock concluded, “Bitcoin miners mean we can get more energy more cheaply for more people, which is strongly correlated with human flourishing.”
Bitcoin 2022 is part of the Bitcoin event series hosted by BTC Inc, the parent company of Bitcoin Magazine.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.