October 1, 2022

Does The Energy Industry Benefit From Bitcoin Mining Operations?

It is only normal for new technology to be met with some sort of resistance until they are broadly and integrally understood.  

Unfortunately, policymakers and regulators are illiterate about new tech and do not try to understand it before setting up parameters for its usage. This leads to a halt in innovation while they play catch-up.

It now seems as though every month, there is someone who intends to cut down the wings of cryptocurrency with another regulatory law. Just four months ago it was the turn of Erik Thedéen, the vice-chair of the European Securities and Markets Authority, who – through an interview with the Financial Times – called for a European Union Ban on all Bitcoin mining methods.

It is the latest attack on Bitcoin by regulators that have refused to do their research on the fast-rising tech of Bitcoin mining, using blockchain technology.

The moment these uninformed regulators begin to understand the immense role of Bitcoin mining in the energy sector today, the idea of baking Bitcoin mining operations will start looking like a very bad idea.

Should The State Really Dictate Energy Usage?

Energy is a basic part of the day-to-day life of everyone. It is a key essential when it comes to human flourishing so it is no surprise that individual governments have taken it upon themselves to improve the energy sector of the people that they govern.

However, in recent times the policy agenda has greatly, yet gradually, shifted away from finding ways to increase energy affordability and reliability, towards mitigating energy use. This new normal in the energy sector can be very well described as anti-humanistic and comes at the heavy price of improving human welfare by fluctuating energy prices.

Furthermore, by intending to dictate the precise terms of how companies, organizations and people should use energy, stakeholders which include regulators and governments are being shortsighted, overlooking the real values that innovative new technologies can offer.

As a matter of fact, bitcoin has a very vital role to play in enabling the transition towards renewable energy by mitigating many of the challenges that this transition presents.

How Straightforward Is The Transition To Renewable Energy

There are a few measures to consider when evaluating the usefulness of different energy sources. There are actually three main measures to look at Cost, reliability and abundance.

Although the world is seriously seeking a renewable source of energy from the perspective of environmental preservation, the reality is that no renewable energy source can perform particularly well against these three measures listed above.

While renewable energy is abundant, it is variably spread all around the world and is much easier to obtain in some locations than others.

Secondly, it is considered an intermittent power source. City power grids always require a baseload and power source that always provides continuous power. 

However, the truth is that energy systems that are too reliant on renewable energy, usually move from insufficient power to much power which may cause problematic power surges on the grid.

Conclusively, it is important to note that renewable energy receives heavy government subsidies to operate. Consequently, the cost of production will decrease over time but in the near future, renewable energy just raises the cost of energy to the average household individual both in terms of ridiculously increased energy bills and also higher taxes.

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