An Open Letter to President Biden Regarding Bitcoin Mining
Proof-of-work mining could be a key component of the administrations plans to expand renewables and upgrade America's infrastructure.
As the CEO of CleanSpark, a publicly-traded bitcoin mining company with a background in the green energy sector, I write to bring your attention to a technology that is catalyzing the development of our nation's energy grid into one that is more renewable-powered, efficient and interconnected.
Zach Bradford is the CEO of CleanSpark.
Bitcoin mining, the process by which new bitcoins are created and transactions are added to Bitcoin’s public ledger, has been regrettably politicized. Often the conversations about bitcoin mining ignore the perspective of those closest to it, like residents of a town with a bitcoin mine. It is essential to look at the facts as they are and recognize that the very nature of bitcoin mining can be turned into an opportunity to revolutionize America’s energy landscape.
Last week, nearly 110 million Americans were under extreme heat advisories, suggesting that a heat wave might be imminent. The 2021 heat wave is estimated to have resulted in billions of dollars in damages and several hundred deaths. This recurring loss to life and economy can be significantly reduced through energy grids that are more efficient, reliable and constantly load-balanced.
The aging infrastructure of our nation’s energy is dotted with recent instances of blackouts that have occurred because of natural calamities or demand peaks led by extreme temperatures. We need to build more generating capacity and upgrade existing infrastructure to realize a future where 100% of the power demand in the United States is met through clean, renewable and zero-emission energy sources.
Thanks to bitcoin mining, the same entrepreneurial spirit that built our great nation is working to revolutionize our energy infrastructure while making it greener in the process. Entrepreneurs and inventors are drawn to the energy industry because of bitcoin mining, which creates lucrative opportunities for energy ventures.
See also: Bitcoin Mining Has a Superpower
In the last three years, the number of bitcoin mining companies traded on Nasdaq has more than tripled to 20. An increasing number of these companies mine using predominantly renewable sources of energy because that kind of energy is sustainable not only for the environment but also for business.
Bitcoin mining encourages new renewable energy projects by making otherwise unprofitable projects profitable, and can enable renewables to generate a higher percentage of grid power with no change in the cost of electricity.
In addition to promoting renewable energy, bitcoin mining can also help improve the efficiency and interconnectivity of the nation’s energy grid. Bitcoin mining’s unique power consumption characteristics make it the perfect complement to underutilized or stranded sources of power throughout our nation.
As bitcoin mining clusters are often established in remote areas where renewable energy potential is high but infrastructure is lacking, the development of mining facilities requires improved interconnection. As a result, this fosters the creation of new transmission lines and infrastructure, benefiting the local energy grids and making our nation’s energy infrastructure more resilient.
In order to maximize the benefits of incorporating bitcoin mining into the energy grid, the development of more advanced smart grid technology becomes imperative. Integrating mining operations with smart grids can lead to more efficient energy usage, reduced transmission losses and better load management.
Bitcoin mining operations provide crucial flexibility to the energy grid by acting as "demand response" units. During periods of high renewable energy generation, such as sunny days with abundant solar power or windy days with ample wind energy, excess electricity can be directed to mining facilities. By doing so, we effectively utilize surplus renewable energy that would otherwise go to waste.
Moreover, during periods of peak demands, miners have been known to curtail or shut down their mining operations to supply critical energy to the grid. They are able to do this in minutes. If the mining facility is also generating its own power, this redirection of power to the grid can save approximately 14 hours that a power plant may otherwise (in the absence of bitcoin mining) need to reach maximum generation capacity from start up.
Not only does this load balancing help prevent energy grid instability and reduce curtailment of renewables, it also helps drive the price down for other consumers of the grid’s energy.
As bitcoin mining continues to evolve rapidly, the industry is investing heavily in research and innovation to find more energy-efficient methods and hardware. This drive for efficiency improvement has spilled over into other industries and sectors, fostering a culture of energy-consciousness and technological advancements in various industries.
Mr. President, leveraging the potential of bitcoin mining to accelerate the transition to a renewable-powered, efficient, and interconnected energy grid presents a remarkable opportunity for our nation's energy future. By providing incentives that encourage miners to use renewable energy sources and invest in sustainable practices, we can create a win-win situation for both the environment and the economy.