It is common thinking for many people that the high energy consumption of Bitcoin mining is bad for the environment. However, this is precisely what can drive us to find real cheap energy alternatives.
Photo by Jonatan Lewczuk on Unsplash
Real Economic Incentives for Research
If we consider the energy costs, it's easy to understand that people cannot just mine it out of nothing in an unlimited manner. And so, mining Bitcoin motivates people to look for cheaper, cleaner energy sources to be profitable.
This search for cleaner energy has incentives that are not just for the sake of good publicity or to be aligned with the "Green Movement". People are looking for cleaner energy sources with the motivation of making money! It has a real economic incentive.
This also allows for the free market economy to think and do research - or even work on real projects to exploit available natural energy sources that perhaps are not being used at their full capacity at the present.
It also democratizes the energy market as Bitcoin allows any country to indirectly export its energy to the wide international markets and to get a good profit margin that depends only on its energy costs.
Democratization like this gives those countries with access to cleaner and natural resources the opportunity to invest in infrastructure that has the potential of making profits. If not for profits themselves, it could at least help subsidize its retail prices.
Bitcoin Mining Coexistence with Traditional Power Demands
Here in my country, Paraguay, there's a city called Villarrica in which the local private electric power provider has partnerships with local crypto-mining companies and they help it maximize or optimize the total energy purchased from the High tension provider.
The way this works is as follows: They have an agreement through which they control the total amount of power provided to them and so they can limit their access to electricity when the retail consumption from traditional use is higher - like from the AC usage in summer. And they have an almost unlimited capacity for when the retail usage is low.
And a good and important point to consider is that here in Paraguay the full electrical capacity comes from hydropower sources. But, we cannot use it all because we are not that many people, and the typical economic industries are not fully developed yet.
So, the motivation is not just to directly profit from Bitcoin mining but also to optimize and use all the capacity that can be derived from natural resources - or at least the idle capacity.
An Opportunity for all to Participate
There's always an opportunity to keep looking for cheaper energy sources and move away from traditional fossil fuels, and Bitcoin gives an opportunity and interesting incentives for anyone to participate in this search for more efficient and cleaner energy sources.