In many parts of the world, access to electricity is a luxury that we often take for granted. For example, Sub-Saharan Africa faces a severe electricity deficit, with more than 600 million people living without electricity. This deficit leads to economic stagnation, reduced food production, poverty, and even civil unrest. The relationship between access to electricity and economic growth is undeniable, and regions with electrification rates below 80% consistently suffer from lower per capita GDP. The challenge is to expand electrical infrastructure to these underserved areas, which is capital-intensive and often financially infeasible for governments with limited resources. This is where Bitcoin mining is a potential solution that could provide a path to electrifying areas that have long been without electricity.
Bitcoin mining has been the subject of much controversy, with critics often focusing on its perceived environmental impact. However, beneath the sensational headlines and mainstream media narratives lies a story of potential humanitarian benefits and energy innovation. By harnessing stranded energy in remote locations, Bitcoin mining can provide a source of income for new power plants and thus support the construction of electrical grids.
Despite the ongoing smear campaign against Bitcoin mining, knowledge of the importance of harnessing the stranded energy of Bitcoin mining is slowly gaining momentum. In fact, that's the story beautifully captured in the newly released award-winning documentary, Stranded: Short dirty coin by Alana Mediaviala Diazwhich shows how Bitcoin miners at places like SSA are ingeniously reusing stranded energy, breathing life into both Bitcoin and forgotten energy infrastructure.
In this article, we will explore the overlooked positive aspects of Bitcoin mining, compare its energy consumption to other industries, and show how Bitcoin mining can stimulate the discovery of new energy sources and the construction of new energy infrastructure.
What is stranded energy anyway?
Stranded energy refers to energy sources that exist somewhere but are not being used or harnessed effectively for productive purposes. It is essentially energy that is isolated or “confined” to a particular location for various reasons, such as a lack of infrastructure to transport it or a mismatch between the location of energy production and demand for it.
For example, when new electrical networks are developed, especially in remote areas, the energy infrastructure may be ready before demand increases. This means that until consumers are connected to the grid, the power generated will be more than what is immediately needed, leaving it “stranded” and eventually lost until more users connect. This is a big problem that Bitcoin mining can help solve, and this area in particular is one of the key benefits of mining that Stranded has explored in great detail.
In an interview, Alana highlighted how Bitcoin mining, by monetizing excess energy in areas lacking traditional demand, acts as a financial catalyst for building critical grid infrastructure, thus changing lives and challenging our perceptions about the societal impact of energy. She further elaborated on this by saying:The concept of how a network grows through demand was not something I had ever thought about. In the film I wanted to portray that it is a great honor that we have access to electricity and that mining is able to finance new grid infrastructure in places that never had it before.
Take Ethiopia for example. It has the potential to generate more than 60,000 megawatts of electricity from “renewable” sources, but currently has only 4,500 megawatts of installed capacity. 90% of its electricity is generated from hydropower, with geothermal, solar and wind making up the difference. However, the country still suffers from severe energy shortages, with only 44% of its 110 million people having access to electricity. With projects such as the Grand Ethiopian Renaissance Dam 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 in the next 10 years. The introduction of Bitcoin mining has the potential to finance electricity infrastructure projects.
Dispelling misconceptions about Bitcoin mining
One of the most common misconceptions surrounding Bitcoin mining is the idea that it consumes a massive amount of energy, exceeding the energy consumption of entire countries. Critics often point to reports that Bitcoin mining consumes more electricity than several countries, including Ireland, Nigeria and Uruguay. The Bitcoin Energy Consumption Index released by cryptocurrency platform Digiconomist estimates annual energy use at 33 terawatts, on par with countries like Denmark.
However, it is important to analyze this criticism and place it in the broader context of energy consumption. While it is true that the power usage of the Bitcoin network seems high, it is essential to remember that power consumption in and of itself is not inherently bad. This criticism tends to assume that energy is a finite resource and that allocating it to Bitcoin mining deprives other industries or individuals of this valuable commodity.
In fact, energy is a vital and expandable resource, and the idea that one use is more or less wasteful than another is subjective. All users, including Bitcoin miners, incur a cost and pay the full market price for the electricity they consume. It is a fallacy to assign Bitcoin mining to its energy consumption while neglecting other industries. As Alana also pointed out, “It is a common misconception that people consider what the media often repeats about Bitcoin. No one ever thinks about the energy consumption of the industries they interact with every day. This is not a common number that people know about things, but when it comes to Bitcoin, it sure is dirty due to all that energy consumption!
Comparing Bitcoin to other energy-intensive industries
To put things into perspective, let's compare Bitcoin mining to some 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 high energy consumption of the paper and pulp industry. In order to counter the myths surrounding the “risks” of Bitcoin mining and its energy use, a thorough understanding of energy consumption is required. While it is important to study the environmental impact of any industry, highlighting Bitcoin mining for cash while overlooking other energy-intensive sectors is a flawed approach.
What does the future hold?
Unlike any technology before it, Bitcoin mining stimulates the exploration of cost-effective ways to harness energy, regardless of geographic or traditional energy constraints. This financial momentum could spark an energy revolution on a scale not seen since the Industrial Revolution, potentially propelling humanity into becoming a Type 1 civilization. A point of view also shared by Alana, when asked about her next film project: “The next question is about what it will take for us to reach a Type 1 civilization that uses Puerto Rico as our model underdog undergoing major infrastructural change. It is a pivotal moment in the island's history and could serve as an example for failed networks around the world.
As economic incentives drive Bitcoin mining to saturate the energy sector, a convergence is occurring. Energy producers monetize surplus and stranded energy through Bitcoin mining, while miners vertically integrate to enhance competitiveness. In the foreseeable future, more efficient miners could become energy producers themselves, potentially upending the traditional energy grid model.
This is a guest post by Kudzai Kutukwa. The opinions expressed are entirely their own and do not necessarily reflect the opinions of BTC Inc or Bitcoin Magazine.
