Bitcoin Course | Big Picture Basics 2.3 – Balancing the Grid
“Dynamic Supply requires Dynamic Demand.”
The renewable transition brings about a new wave of volatility in electricity pricing. Many Bitcoin miners seek stability amidst this flux, by locking into Power Purchase Agreements (PPAs). Think of them like a fixed mobile phone contract but for electricity, a miner agrees to a fixed rate of example: $.05 per kWh, converting that energy into about $.10 worth of Bitcoin revenue.
Free Course Full Lesson https://hashpower.academy/lessons/2-grids-electricity/
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Video Transcript:
[Music] the grid is one of the biggest and most important topics of this entire module because it boils down to the basics of we have people that produce power at all different times of the day and they have no control over when they produce it Renewables but also you’ve got the demand of power of people that want want to use power when they want to use it how they want to use it in whatever quantity they want to use and so you’ve got this mismatch of production and consumption and the grid has to balance an exact amount of production and consumption keep the grid balanced because a power cut occurs when it becomes imbalanced now electricity prices typically aggregate the supply and the demand of electricity on the grid and so this is a problem that mining is a solution because miners use a huge but constant rate of power so when there’s loads of power and lots of wind and loads of solar but very little demand Bitcoin mining could soak up all that Excess power and monetize it alternatively what if we’ve got no wind it’s the middle of the night and there’s no rain what do you do when You’ still got demand for electricity and this is where miners can also step in instead of consuming the power to turn it in essentially a quantity of electricity into a quantity of money cuz that’s what Bitcoin mining is essentially is that that electricity that they were consuming instead they switch off and sell the power and that rate between the amount of electricity and the amount of Bitcoin that make we call this the SATs per kilowatt rate and if the price of electricity was higher than this rate why mine it as Bitcoin when you can earn even more Bitcoin by selling the power and rebuying it as Bitcoin so it’s a healthy Arbitrage which helps stabilize our energy grids and our Energy prices to the downside and to the [Music] upside [Music]
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