It’s official, Ted Cruz is now a bitcoiner. Keep in mind, however, that he is a Senator for Texas and the state is quickly becoming the largest Bitcoin hub in the United States. The politician may serve his constituency, but that doesn’t detract from his message. “In five years’ time, I expect a dramatically different terrain where bitcoin mining will play a significant role in strengthening and hardening the resistance of the web“He said at the Texas Blockchain Summit.
Related reading | Ted Cruz says crypto “got screwed up”, here’s why
The Senator joined notorious Bitcoin maximalist Jimmy Song in a fireplace chat, and Bitcoin mining’s energy consumption was the main course on the menu. And since ESG concerns have been one of the main lines of contention against Bitcoin this year, this is where we will focus.
What exactly did Ted Cruz say about Bitcoin mining?
The Bitcoin community’s response to ESG concerns is consistent. Bitcoin mining is actually a neutral, constantly hungry third-party customer for energy producers. It provides a much-needed financial incentive to help develop new, cleaner sources of energy. It can also finance existing ones. The most important example of this application scenario is natural gas.
Surprised everyone, Senator Ted Cruz explained the concept perfectly.
“If you look at natural gas now, in West Texas, that’s the amount of natural gas that is flared. Fifty percent of the natural gas flared in this country is currently flared in the Permian, west Texas. I think this is a tremendous opportunity for Bitcoin because that is currently energy that is simply being wasted. It is wasted because there is no transmission equipment to get this natural gas where it could be used the way natural gas would normally be used. It is being burned right now. “
As so often, Bitcoinist reported on this procedure two years ago. In the article entitled “Bitcoin miners in Canada discover breakthrough in green energy,” we said:
“With the new solution, this will no longer be the case, as companies can install Bitcoin mining equipment and use the gas to mine the coins. As more natural gas is used to run mining operations, the carbon dioxide emissions from gas and oil exploration are significantly reduced, which ultimately leads to more environmentally friendly mining. “
So it’s not just CO2 neutral. It’s climate positive. Nowadays, however, Bitcoin mining can do even more.
BTC price chart for 10/14/2021 on Bittrex | Source: BTC / USD on TradingView.com
What is “Demand Respond” and how does it relate to Bitcoin mining?
Once again, Ted Cruz was surprised that Ted Cruz could and did answer that question.
“Because of the ability of bitcoin mining to turn on or off instantly when you have a moment when you have a power shortage or power crisis, be it a freeze or some other natural disaster that drops power generation capacity, that does it Ability to shift this energy immediately in order to feed it back into the grid. “
Unlike any other industry, Bitcoin mining can be turned on and off at will. The question arises, why should the miners turn off their equipment? In an emergency, they would not only have a moral obligation to do so, but also a financial incentive. During a normal scenario, the population doesn’t need this excess energy, so the Bitcoin mining rigs are there in the first place. In an emergency, the network operator would simply buy this energy, probably at an additional cost.
The theory is that building natural gas pipelines is not economically feasible. However, with Bitcoin mining as an incentive, they will be building natural gas powered generators on site. In an emergency, the grid would buy this energy. At the same Texas Blockchain Summit, Bitcoin expert Nic Carter introduced the “Demand Respond” concept and deepened the idea. In the section “Bitcoin mining is an energy sponge” of his talk he says:
Bitcoin mining absorbs an oversupply in non-productive times and improves the profitability of renewable energy projects.
Miners throttle the load when prices are high and provide better access to households during times of high demand.
• Miners can use renewable energy when there is no economic consumer and are interrupted during peak times.
In summary, Bitcoin mining will finance green energy
Natural gas is the most vivid example of our thesis, so that’s what we focused on. However, the concepts also apply to other renewable energy sources. Especially intermittent like wind and sun. As Nic Carter said in his talk: “It is common knowledge that the wind / solar generation profile does not match typical household demand.“Bitcoin mining can use the excess energy and thus create incentives for the construction of a new green electricity infrastructure.
Related reading | The Texas commercial law, which makes crypto legal in the state, comes into effect
And this is just beginning. The incentive that Bitcoin mining offers could open up new renewable energy sources that we don’t even think about. As Ted Cruz said: “In five years’ time, I expect a dramatically different terrain where bitcoin mining will play a significant role in strengthening and hardening the resistance of the web. “
Featured image by Pete Alexopoulos on Unsplash – Charts by TradingView
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