In many parts of the world, access to electricity is a luxury that we often take for granted. Sub-Saharan Africa (SSA), for example, faces a serious electricity deficitwith over 600 million people without power. This deficit leads to economic stagnation, reduced food production, poverty and even civil unrest. The correlation between access to electricity and economic growth is undeniable, and regions electrification rate less than 80% constantly suffer from a decline in GDP per capita. The challenge lies in expanding electricity infrastructure in these underserved areas, which is capital-intensive and often financially unfeasible for resource-constrained governments. This is where Bitcoin mining is a potential solution that can offer a path to electrifying regions that have long been without access to electricity.
Bitcoin mining has long been the subject of much controversy, with critics often focusing on its perceived environmental impact. However, under the sensational titles And mainstream media stories, lies a story of potential humanitarian benefits and energy innovation. By harnessing energy stranded in remote locations, Bitcoin mining can provide a source of revenue for new power plants and thus support the construction of electricity grids.
Despite the ongoing smear campaign against Bitcoin mining, knowledge of the importance of harnessing stranded energy for Bitcoin mining is slowly gaining ground. In fact, that’s the story that’s captured beautifully in the new film and prime documentary, Stranded: A Short of Dirty Coins by Alana Mediavialla Díazwhich shows how Bitcoin miners at places like SSA ingeniously reuse stranded energy, bringing both Bitcoin and forgotten power infrastructure back to life.
In this article, we will explore the overlooked positive aspects of Bitcoin mining, compare its energy consumption to that of other industries, and explain how Bitcoin mining could potentially encourage the discovery of new energy sources and the construction of new energy infrastructure.
What is stranded energy?
Stranded energy refers to energy sources that exist in a location but are not used or harnessed efficiently for productive purposes. Essentially, it is energy that is isolated or “stranded” in a given location for various reasons, such as lack of infrastructure to transport it or a mismatch between the location of energy production and demand.
For example, when new electricity networks are developed, particularly in remote areas, the energy infrastructure can be in place before demand catches up. This means that until consumers are connected to the grid, more energy is produced than is immediately needed, making it “blocked” and ultimately wasted until more users connected. This is a huge problem that Bitcoin mining can help solve, and this area in particular is one of the main benefits of mining that Stranded has explored in detail.
In an interview, Alana highlighted how Bitcoin mining, by monetizing excess energy in regions lacking traditional demand, acts as a financial catalyst for building vital network infrastructure, thereby changing lives and challenging our perception of the societal impact of energy. She expanded on this further, saying: “The concept of how a network grows based on demand is not something I’ve ever thought about. In the film I wanted to show that it is a great privilege to have access to electricity and that mining is able to finance new grid infrastructure in places that have never had it before.
Take the example of Ethiopia. He has the potential to generate more than 60,000 megawatts (MW) of electricity from “renewable” sources, but currently has only 4,500 MW of installed capacity. 90% of its electricity is produced from hydroelectricity, with geothermal, solar and wind making up the difference. However, the country still experiences severe energy shortages, with only 44% of its 110 million residents having access to electricity. With projects like the Grand Ethiopian Renaissance Dam (GERD) under construction, which is expected to generate an additional 5,150 MW, the government expects to have a total of 17,000 MW of installed capacity over the next 10 years. The introduction of Bitcoin mining has the potential to finance these power infrastructure projects.
Dispelling Misconceptions About Bitcoin Mining
One of the most common misconceptions about Bitcoin mining is the idea that it consumes an exorbitant amount of energy, exceeding the energy consumption of entire countries. Critics often point to reports which suggests that Bitcoin mining consumes more electricity than many countries, including Ireland, Nigeria and Uruguay. THE Bitcoin Energy Consumption Index by cryptocurrency platform Digiconomist estimates an annual energy consumption of 33 terawatts, on par with countries like Denmark.
However, it is important to dissect this criticism and place it in the broader context of energy consumption. While it is true that the energy consumption of the Bitcoin network seems significant, it is essential to remember that energy consumption in itself is not bad in itself. This criticism tends to presuppose that energy is a limited resource and that its allocation to Bitcoin mining deprives other industries or individuals of this precious commodity.
In reality, energy is a vital and expendable resource, and the notion that one use is more or less costly than another is subjective. All users, including Bitcoin miners, incur a cost and pay the full market rate for the electricity they consume. Favoring Bitcoin mining for its energy consumption while neglecting other sectors is a mistake. As Alana also pointed out, “People consider what the media frequently repeats about Bitcoin to be common misconceptions. No one ever thinks about the energy consumption of the industries they interact with on a daily basis. This isn’t a common number that people know about, but when it comes to Bitcoin, it’s certainly dirty because of all that energy consumption!
Comparing Bitcoin to Other Energy-Intensive Industries
To put things in perspective, let’s compare Bitcoin mining to other energy-intensive sectors that often escape similar scrutiny:
I don’t know about you, but I can’t remember the last time I heard complaints in the media about the paper and pulp industry’s high energy consumption. In order to counter the myths surrounding the “dangers” of Bitcoin mining and its energy consumption, a nuanced understanding of energy consumption is necessary. While examining the environmental impact of any industry is crucial, criticizing Bitcoin mining while neglecting other energy-intensive sectors is a misguided approach.
What does the future hold?
Unlike any previous technology, Bitcoin mining encourages the exploration of profitable ways to harness energy, regardless of geographic limitations or conventional energy constraints. This financial boost could spark an energy revolution on a scale not seen since the Industrial Revolution, potentially propelling humanity to become a type I civilization. A point of view also shared by Alana, who, when asked about her next film project, declared: “The next question is what it will take for us to achieve a Type 1 civilization using Puerto Rico as an underdog model and undergoing major infrastructure changes. This is a pivotal moment in the island’s history and can serve as an example to failing networks around the world.
As economic incentives push Bitcoin mining To saturate the energy sector, convergence is occurring. Energy producers monetize excess and stranded energy through Bitcoin mining, while miners vertically integrate to improve their competitiveness. In the near future, the most efficient miners could become energy producers themselves, potentially reversing the traditional power grid model.
This is a guest post by Kudzai Kutukwa. The opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.