Bitcoin and renewables cannot save us from climate change, but they can help. It is capitalism and the need for continued economic growth that pulls us farther from our climate goals. Not a decentralized digital currency, as some claim.

Satoshi (2008) foresaw such dilemmas, stating “You will not find a solution to political problems in cryptography…”

In this article we look further into Bitcoin’s self-regulating properties and unfair criticism. These opinions are based on observations of energy politics, bitcoin and renewables, and climate change. Lastly, we express why Bitcoin and its PoW are important for us moving forward. As Satoshi expresses, “The utility of the exchanges made possible by Bitcoin will far exceed the cost of electricity used. Therefore, not having Bitcoin would be the net waste” (2010).

Bitcoin’s Energy Demand

Critics are concerned with Bitcoin’s growing PoW network and perceived e-waste problem. They believe free markets create a threat to the environment by encouraging resource squandering. Contrarily, free markets, alongside Bitcoin’s self-regulating properties keep its hash rate at sustainable levels. Its financial incentives spur energy innovation.

For example, Bitcoin’s PoW is increasing, but the rate is slowing. This is because Bitcoin’s system has built-in negative feedback loops like the difficulty adjustment and exponentially decaying miner rewards. Further, exogenous limitations like energy availability, ASIC chip supply, and regional policies prevent rapid hash rate expansion.

We see this phenomenon now. The hash rate has remained around 200 EH/s for the last four months, primarily due to energy unavailability. Additionally, machine prices increased by up to 10x their value last year with the bull run, deterring overconsumption. And since, miner rewards and rig values have dropped by ~50%.

Satoshi speaks of this unstable equilibrium with regard to the limited supply of miner rewards, stating “If everyone bought faster machines, they wouldn’t get more coins than before” (2009). Thus Bitcoin can only profitably sustain so many miners.

Further, to single out Bitcoin’s use of a fraction of a percent of the world’s energy is short-sighted. Large miners compete fairly with other industries for electricity contracts; much of the power they use is stranded or surplus. Home miners simply consume what is available to them at market rates.

Efficiencies and E-Waste

The advancements of efficiency in ASIC chip design, and other innovations like immersion cooling continually reduce the electrical draw per terahash. Hardware progressions incentivize miners to upgrade to more sustainable machines to make bigger profit margins. Thus, Adam Smith’s invisible hand pushes Bitcoin mining’s energy reduction, not government policy. In other words, miners bring about unintended social benefit by acting in their own self-interest.

As for e-waste, 6 year old machines are still profitably mining. Broken machines are stored, repaired, or repurposed. Mobile phones and laptops, on the other hand, have no market value after just a couple years. Redundant smart phones alone contribute to 10% of all e-waste.

Lastly, miners should not be singled out for ‘the global chip shortage’, as they only use a small part of the world’s supply. Bitcoin ASIC manufacturers also use imperfect chips on reduced price models, whereas other industries discard them. Next generation machines account for carbon neutrality. Moreover, top manufacturers vow to only work with companies with sustainable business practices.

Energy Politics

It is sad to see ‘dirty miners’ pitted against ‘clean miners’, particularly when done by other bitcoiners. The source of our energy is largely out of our control. Energy mix is a complex, geopolitical issue. Bitcoin is borderless, let us not judge.

Dirty Miners

We’ll use China as an example. China have about the same amount of renewables as USA, ~10,000 TWh. Yet, much of their renewable energy is stranded because transmission lines are being laid. Before the 2021 mining bans, bitcoin miners used to migrate seasonally to take advantage of these terawatts of stranded hydropower. Albeit, critics only focused on the 30% of the hash rate that was coal-powered in the dry season. Whilst they ignored that up to 50% of bitcoin’s hash rate was run on pure hydro in the wet season.

Furthermore, China is allowed to consume dirtier fuels because it is classified as a developing nation by the UN. This means that in line with the Paris Agreement carbon budget, China has a longer time window to achieve neutrality because their citizens are poorer than in USA, for example, in terms of GDP. So perhaps bitcoin miners should not have been stigmatized for simply using the fuel sources available to them. Especially as most of the goods produced with Chinese coal are consumed by wealthier nations. To illustrate this, see the difference in ‘energy wealth’ below. A US citizen consumes nearly four times as much energy as a Chinese person.

Bitcoin and renewables: Chinese energy use per person versus USA energy use per person in a graph.

O&G Miners

Likewise, some consider O&G bitcoin miners in North America and other nations to be ‘dirty’. Yet, with the rising cost of fuel, and import bans from Russia, nonrenewable energy production will boost up despite environmental policies. Especially as oil and gas are the only transportable forms of energy over longer distances, and the EU will need help to ween off from their reliance on Russia. Also, fossil fuels are cheaper than renewables. This is partly because of subsidies, but mainly because fossil fuel procurement does not need the same amount of initial investment as renewable projects.

So, if some of these drilling sites simultaneously mine bitcoin, which in-turn minimizes uncombusted methane release, what’s the problem? These miners are beneficial to climate policies because they reduce their CO2-equivalent emissions by about 63% compared to continued flaring. And, interestingly, it was again Bitcoin’s invisible hand that drove these miners to innovate a way to utilize an abundant source of free power, whilst protecting the atmosphere.

Clean Miners

The same practice goes on in other countries with an abundance of clean energy. In Russia, bitcoin miners take advantage of excess renewables at large hydro dams from Soviet times. Likewise, miners in Sweden and Norway act as batteries for large wind plants and dams, whilst transmission lines to Southern regions are being installed.

Miners can turn off when supply is less than demand. They do this either by being asked by the energy company, or because mining is temporarily unprofitable due to power price increases alongside dry or windless weather patterns. Though, it is likely that once a grid is stabilized on a national level, electricity prices near dams will rise, and miners may move on to other opportunities.

On the downside, policy changes and profitability drops can cause bitcoin miners using renewables to go bust or be banished. It is therefore unlikely that bitcoin miners will “build-out grids”. Case in point, a nuclear power plant costs about $1 trillion to build, and takes four years. Yet the total annual BTC miner income was $15 billion in 2021. Therefore, bitcoin miners can instead assist to consume renewables until they can be transported to other regions. Or, they can help to partially fund projects, maintain energy infrastructure, or offset heating costs, shown below.

BitHelm image of Bitcoin mining and energy grid transformations.
Image borrowed from Bit Helm who says, “#Bitcoin is an energy-transformation machine that can be leveraged to help secure our energy grids and lower user costs. Here are 4 use cases for mining Bitcoin from the generation to the end users. Everybody can participate and benefit from this proof of work technology.”

Further, energy is not truly a free market, as governments are in charge of ‘keeping the lights on’. They regulate energy prices through subsidies and policies. Therefore, large-scale miners must work together with governments to achieve collective climate goals and mutually sustainable operations.

Finally, miners do not usually push energy costs down for a collective good. For instance, between 2020-2021, prices in Kazakhstan went from 2¢/kWh up to about 8¢/kWh. This was the result of demand outpacing supply, tightened energy policies, and the introduction of a carbon tariff. In turn miners left. In light of the situation, bitcoin miners unwittingly helped to push Kazakhstan’s electricity to a fairer market price. A price that could better sustain their energy infrastructure.

Corporate versus Independent Miners

Corporate miners benefit from government subsidies in the form of industrial energy prices, and sometimes tax incentives. But their scaled-up operations come at a huge cost. And like Hal Finney, industrial miners are looking for ways to reduce their CO2. But, their motivation is likely driven by financial incentives; to lure in investors, and to please regulators. This is just another example of Bitcoin’s self-regulating properties driven by profit-seeking.

Bitcoin and Renewables

On the other hand, the majority of smaller miners do not have the legal or financial leverage to get such cheap power rates. Most cannot choose the origin of the energy that comes through the plug in their wall. And, dirtier energy sources are correlated with lower socioeconomic factors.

So, by favoring ‘greener’ miners with more subsidies, we must consider that we are potentially shutting out grassroots operations that are morally important for Bitcoin’s success as an alternative to the corrupt fiat system. The beauty of Bitcoin is that it is designed for everyone. Let’s let governments decide energy policy.

As Satoshi says in 2010 in relation to bitcoin mining,

“Some places where (bitcoin) generation will gravitate to: 
1) places where it’s cheapest or free
2) people who want to help for idealogical reasons
3) people who want to get some coins without the inconvenience of doing a transaction to buy them
There are legitimate places where it’s free. Generation is basically free anywhere that has electric heat, since your computer’s heat is offsetting your baseboard electric heating. Many small flats have electric heat out of convenience.”

So, in other words, bitcoin miners seek out cheap energy, as discussed, which is both renewables and fossil-fuels. But crucially, bitcoin enthusiasts, non-KYCers, and home miners who can offset their heating costs will always mine, no matter the cost. These are the ants; the ‘honest nodes’ coming from the bottom up, not the top down.

The Ants

The ants represent more than half of Bitcoin’s hash rate. This is the community of users who are vital in driving the next phase of adoption. They protect Bitcoin’s core values by mining, running consensus nodes, and transacting P2P. They can mine anonymously via TOR or a VPN (so long as their energy footprint isn’t traced), and keep Bitcoin honest. As Satoshi describes:

The smaller farms are then the “honest nodes”. (I need a better term than “honest”) The more smaller farms resort to generating bitcoins, the higher the bar gets to overpower the network, making larger farms also too small to overpower it so that they may as well generate bitcoins too. According to the “long tail” theory, the small, medium and merely large farms put together should add up to a lot more than the biggest zombie farm.” – Satoshi, 2008

Economic Growth

Analysts believe that the price of BTC could grow by 25x what it is today over the next few years. At $1 million dollars a coin, the market cap would near $20 trillion, and miner earnings would be between ~$2-$4/TH. Based on this ‘NGU’ scenario, miner HODLers would be very wealthy. They could use their holdings to create financial products and lend to others…

However, to some it seems that financial products on top of BTC may just encourage the same continued economic growth behavior that got us in trouble in the first place. And, if corporate miners or governments want to flag or block transactions because of their origin or power source, it will likely bring forth a fork. The community will refuse to comply by their rules. Nick Szabo spoke of this impasse in 2019, stating “some people come into Bitcoin with a traditional banking mindset, looking for Bitcoin’s identity, not realizing that it doesn’t need one” [paraphrased].

Luckily, most miners want to comply with the consensus in the name of profit. Miners also need to sell coins to pay for operating costs. In turn, this promotes utility and adoption.

Furthermore, holding bitcoin and mining is still risky. Institutional miners are tied into the dynamics of the current system, which could weaken their position if interest rates, and the cost of goods and services continue to rise. At the same time miner earnings and/or machine prices could go down through BTC price seeking behaviors, as Satoshi (2010) explains,

The price of any commodity tends to gravitate toward the production cost. If the price is below cost, then production slows down. If the price is above cost, profit can be made by generating and selling more. At the same time, the increased production would increase the difficulty, pushing the cost of generating towards the price.”

Lastly, scaling through L2 implementations is often cited to be a climate friendly addition to Bitcoin. It reduces the size of the blockchain, and promotes adoption and the innovation of new financial products. But, this tradeoff also introduces security threats, service fees, and arguably reduces the importance Bitcoin’s true P2P utility and PoW. In the end, markets will decide. As it stands, most people already living on a bitcoin standard use a credit card issued through an exchange to make everyday purchases and pay bills, so the exchange is their preferred L2, and BTC is a hard asset. The downfall with exchanges is they require strict KYC/AML, use centralized tokens, and overcharge for on-chain L1 transactions.

Bitcoin’s Utility in the Face of Climate Change

In this article we have focused on Bitcoin and renewables, and described how bitcoin mining may offset the cost of heating and grid infrastructure. But, let’s look farther down the telescope at what Bitcoin’s utility could mean going forwards.


Firstly, Bitcoin brings transparency to our economic system and does not discriminate users. PoW miners replace the central bank, thus the money supply is fixed and immutable. Unlike the central bank, PoW miners will not devalue the currency, leak personal data, or hold money hostage, only to “lend it back in waves of credit bubbles, with just a small amount of real reserves” (Satoshi, 2009). The public ledger can also act to weed out corruption by governments and banks, if a Bitcoin standard is adopted.

What’s more, Bitcoin helps the 1.7 billion unbanked because participation is permissionless – it does not require identity, fixed abode, or a minimum income. And, P2P payments facilitate cheaper remittances, which protects the underprivileged from being extorted by unnecessary transfer fees. Bitcoin mining can also inject income into secluded communities with excess power, without the need for loans or complicated banking services. Seen in places like Sichuan, Irkutsk, and the Appalachian mountains of Kentucky, just to name a few.

With regards to climate change, it is estimated that at least 130 million people will be thrust into poverty and forced to migrate within the next decades. So, with just a seed phrase, people affected by climate change can still hold and use BTC as a digital currency to transact, with full assurance that their money will not be tampered with. Bitcoin brings financial accountability and autonomy back into the hands of the people.

Deep Adaptation

Ultimately, if one moves past the facts that the IPCC models use incomplete and dated research, that we do not have adequate means to sequester CO2 on scale, that we do not know the implications of geoengineering, and that climate disasters are amplifying over time, we come to Jem Bendell. There is growing existential risk to modern civilizations due to climate change, and we must begin to focus on deep adaptation. How can Bitcoin help?

So long as we have access to the internet and some form of electricity, Bitcoin can help people to achieve financial freedom and maintain a global unit of exchange. Even if the world suffered a severe power outage, Bitcoin would still exist. Once reconnected, nodes and miners can use their copy of the ledger to jump straight back into transacting onto the longest chain. This is done in a decentralized manner, without the need for a trusted third-party.

It would also be advantageous for societies to focus on smaller energy infrastructure, opposed to large-scale projects, to provide more energy security in the face of climate change. Bitcoin miners can help to establish such grassroots projects which benefit communities by offsetting the setup cost of small-scale renewables, like agricultural biogas plants. Miner heat can also be repurposed for homes, greenhouses, livestock, etcetera.


The contradiction between impending climate disaster and capitalism’s need for economic growth may never be resolved. Bitcoin can’t fix it. However, adoption of Bitcoin is for the greater good. Bitcoin is a self-sustaining system, aided by the properties of free markets. Its profit seeking miners stimulate energy innovations, and promote financial autonomy. PoW together with a capped supply of coins, and a decentralized consensus, can put an end to the corruption that has debased our currencies.

Finally, Bitcoin is for everyone. It can aid the unbanked, as users can participate without the need to ask for permission. Miners and nodes can run on whatever energy is available to them. Thus, trying to make Bitcoin’s identity ‘environmentally friendly’ is not going to increase adoption, and only confuses the narrative. Governments must enforce a transition to renewables, and bitcoin miners can help. Yet, it must be understood that miners should not be counted on as permanent fixtures in an energy business, because profitability and policies can be volatile.

Previous articleBitcoin Mining Manufacturers Update, 2022
Next articleBitcoin’s Poisson Paradox
Your mining ally. Hashing away to find blocks. Supporting the Bitcoin network. Writing about interesting SHA-256 stuff.