Bitcoin Mining’s Hidden Power: Energy Arbitrage! #BTCkWh | Hashpower Academy

Video Transcript:

hello there and welcome My name is Jake Scandlin and I’d like to take you through what I call the electron liquidity of the Bitcoin network or even more simply the energy exchange rate of Bitcoin Now the first piece to understand here is that the energy price on the grids is based on what’s available supply and demand We produce a certain amount of power and we all consume a certain amount of power And the 21st century completely depends on the electricity grid And so we want to keep it stable the supply and demand And that’s also reflected in price That the optimal condition of the electricity grid is that the price is reflective of stability If we have an upside of too much demand of power and a downside of too much supply of power both reflected in price These conditions create instability that could shut the grid off and that causes even more damage and problems of the world Think about all the hospitals with ICU beds that they need to stay online That’s an extremely important use of electricity But Bitcoin’s context of energy usage is an economic one Bitcoin miners will purchase electricity at an effectively lower rate because they’re buying in very large quantity and they are producing certain amount of Bitcoin with that electricity purchase But here’s the thing as I said there are an economic incentive to using electricity If the electricity price was to rise higher let’s say 25 cent a kilowatt but if they consumed it they’d only make 15 cents Why would they use the power they would switch the machines off and sell power into that demand to bring the price down Inversely the renewable energy future is creating environments where electricity goes negative not this nonsense about Bitcoin using too much energy The electricity grid sometimes has too much energy and someone needs to buy all of that excess supply to bring the price back to stability bringing the grid back to stability So Bitcoin miners will dynamically buy energy that’s cheap and will sell energy that’s expensive to bring the price of electricity back within reason And that’s why Bitcoin mining I consider to have an electron exchange rate and an energy liquidity is because they will dynamically buy power and sell power which stabilizes the grid from the upside and the downside That’s a very interesting thing because as I said we have a renewable future which is intermittent The problem with renewables is that nature is now in control of when we produce power And the grid remains stable if supply and demand are balanced But if we only get power when the sun’s shining the wind’s blowing and the water’s flowing through our hydro dams well that means we have to dynamically change how much power we use in our homes No that’s not how people live But if there is an energy customer out there that will dynamically change how much power they are buying or selling to bring the price of electricity back into stability Well that’s the perfect customer Dynamic energy supply needs dynamic energy demand An economic incentive user of electricity I hope that’s interesting Let me know your thoughts