Green Mining, Stable Grids: Clarifying Misconceptions about Bitcoin Mining

One of the top narratives swirling around politics at the moment is that AI and its attendant data centers are driving up energy prices for Americans. Americans are protesting data center permitting meetings or the centers themselves across the country. Politicians are announcing oversight investigations into how data centers may be driving up prices. Nonprofit group videos on the subject are wracking up millions of views. And politicians of both parties are now scrambling to draft legislation that raises taxes on data centers or finds ways to reduce their impact on consumers’ energy bills.

Too often, however, the role of data centers in changing energy prices is being unfairly mixed together with another nascent technology: Bitcoin mining.

Yet, this connection fails upon even a cursory glance. There is a difference between using electricity that is abundant and electricity that is scarce. One does not constrain resources or significantly impact electricity prices, while the other can cause blackouts and make just keeping the lights on unaffordable. Bitcoin is the former.

The misconception that Bitcoin is an energy hog is not just a few from a few voices in the policy space, but expressed by luminaries in Congress and at nonprofits. Senate Democrats have on multiple occasions in the last few months expressed anxiety about crypto mining as being a major contributor to high energy prices, especially Bitcoin, even to the point of asking for federal agencies to take action. This negative view of energy usage of crypto is echoed in even stronger words by various non-profits, such as Earthjustice. Earthjustice even stated that the state government “shows that the vast majority of PoW [mining] in the state are powered by fossil fuels.”

The narrative is only amplified by the mainstream media, which take these organizations and political leaders’ statements at face value without digging deeper. “Cryptocurrency mining uses huge amounts of power — and can be as destructive as the real thing,” climate columnist Elizabeth Kolbert wrote in the New Yorker, drawing on severely flawed yet oft-repeated research which compared Bitcoin mining’s energy consumption per transaction to that of American households. “Bitcoin mines cash in on electricity — by devouring it, selling it, even turning it off — and they cause immense pollution,” reads an investigation from the New York Times, making similarly flawed comparisons. And just last month the AP, without noting any supporting data, attributed an unspecified portion of the 2.4% increase in U.S. greenhouse gas emissions that occurred during 2025 to the purported fact that “cryptocurrency mining meant more power plants producing energy.”

But Bitcoin’s energy usage does not make it a menace. Bitcoin mining is naturally driven towards cheap, abundant, and renewable electricity. Often, this is energy that would otherwise go to waste, or which sees very low demand, and which is generated at off-peak times. This means that by its very nature, Bitcoin mining counter-balances the bulk of the average community’s energy consumption, bringing equilibrium to the grid — not strain. It is, in a word, bringing balance to our energy force.

We spent five weeks combing through public and private data to better understand Bitcoin’s impact on the grid. Below are our key findings, as well as policy recommendations to ensure Bitcoin mining continues to have a positive impact (read more in this presentation about our findings and recommendations).

• Bitcoin mining is energy intensive, but less so than you might think
• Bitcoin mining is driven towards cheap electricity
• Bitcoin mining often uses more renewable energy
• Hedges and ancillary assets programs amplify grid stabilization

In short, policymakers should use bitcoin mining as a tool, not a threat. And if you’re worried about crypto having a bad impact on energy usage, these aren’t the droids you’re looking for.

Bitcoin Mining is Energy Intensive, But Less So Than You Might Think

Bitcoin mining is energy intensive by design. It uses a “proof of work” consensus mechanism, which involves servers around the world competing to find a number between 0 and

However, the amount of energy that Bitcoin mining consumes has been overblown, largely because studies estimating its energy consumption have used faulty methods. The World Economic Forum claimed that Bitcoin would consume more energy in 2020 than the entire planet did in 2017, for example, when it ultimately only consumed 0.046% of the world’s electricity that year. Another popular study claims that Bitcoin mining alone will raise global temperatures 2 degrees in the next three decades. That study is still frequently cited, despite the fact that it has been thoroughly debunked in peer reviewed journals.

That the past estimates have proven so faulty should be a sign to observers that their future estimates may also be faulty. But somehow, like a recurring prophecy of doomsday that never comes year after year, the Nostradamuses of Bitcoin energy usage still have a healthy flock of devotees.

The most common methodological flaw in studies evaluating the impact of Bitcoin mining is that they estimate energy usage for Bitcoin by transaction. Bitcoin mining is effectively a competition between powerful computers to guess a specific number, called a nonce, whereby the winner is rewarded in Bitcoin. Bitcoin mining’s energy usage is therefore determined by the work it takes to find a nonce, not by the frequency or amount of transactions. 

Even the amount of energy used to find a nonce decreases 50% every few years, which often goes unaccounted for. Other times studies assume that energy production is limitless, and, therefore, that the amount of Bitcoin mining is uncapped, or mistakenly expect Bitcoin miners to continue operating even if their operations are unprofitable. In reality, Bitcoin mining uses about 0.23% of global energy at present, and is responsible for 0.08% of the world’s carbon emissions. Further, these percentages are set to decrease. Such are the hard mathematical constraints of a network with a fixed supply. This was predictable to those with the eyes to look and the ears to listen.

Bitcoin Mining is Driven Towards Cheap Electricity

One major reason Bitcoin’s impact on the environment is set to decrease is that Bitcoin mining is driven towards cheap energy, and cheap energy is often generated from renewable sources. It’s simple economics: Bitcoin miners profits are determined mainly by the price of the Bitcoin they mine, less the cost of the electricity to mine it. Every Bitcoin miner knows their “break even price” — i.e., the energy price above which their operations become unprofitable. For many miners today, that number is between $100 and $150 megawatts per hour.

Electricity prices tend to peak in the morning before people leave for work, dipping in the afternoons, and then peak again in the evening when people come home. This trend is often referred to as the “duck curve,” because when you plot it on a graph, it roughly follows the shape of a duck. It is far more profitable for Bitcoin miners to operate when there is less demand, in the valleys of the duck curve, than in the peaks, when they might not make any money at all. In fact, many miners turn off completely during the peaks of the duck graph, because otherwise they’d operate at a loss.

This trend is what makes Bitcoin good for the grid. We don’t expect a surge in power usage in the middle of the day for any reason absent a snow day, an earthquake, or some other manmade natural disaster — one that would surely make the news. Bitcoin miners can therefore map to this general trend, changing their mining on the fly if there are strange events in the power demand levels on a given day. In effect, Bitcoin flattens the duck’s back, but also provides a counterforce of demand to these patterns. That is grid stabilization quacking in action.

Bitcoin Mining Often Uses More Renewable Energy

It’s for that same reason that Bitcoin mining is increasingly fueled by renewably generated electricity. Wind and solar, the two renewable energy technologies that are operating at scale in markets where there’s a lot of Bitcoin mining, like Texas, generate the bulk of their energy at midday. This is also when the duck curve is at its low point, or when there is the least electricity demand. Because it is very difficult to store that electricity, or transmit it very far, a lot of that electricity goes to waste if it’s not used. Bitcoin miners, however, love to make use of this cheap, renewable energy — minting Bitcoin without putting pressure on the electrical grid. This also means free revenue for the green energy generating companies, bolstering their balance sheets and creating more money for further expansion. It would not be too much to say that ‘Bitcoin is powering the green transition.’

Hedges and Ancillary Assets Programs Amplify Grid Stabilization

In some states, Bitcoin miners are allowed to hedge their bets on electricity prices by entering purchase agreements with energy suppliers where they buy electricity for a long period of time at a flat rate. This may sound like it disincentivizes Bitcoin miners from using electricity at off-peak times, but it doesn’t. Typically, this fixed rate is designed so that the company is overpaying for electricity the majority of the time in exchange for the ability to lock-in operating costs. In the rare times where electricity prices rise above the hedged rate they pay, Bitcoin miners can sell their electricity back into the market — increasing supply when there isn’t enough, and leveling out prices for other consumers.

The same goes for ancillary assets programs, whereby the grid operator can turn down or turn up a Bitcoin miner’s operations in return for paying them a flat fee. If the grid is seeing too much demand, agencies can turn down Bitcoin miners’ operations like a dimmer switch, restoring equilibrium.

While it might sound odd to pay companies to not operate, ancillary services end up saving ratepayers more than it costs. The price of procuring ancillary services for ratepayers in Texas dropped by 74% from 2023 to 2024, for example, in large part because of the participation of Bitcoin miners.

Policymakers Should Use Bitcoin Mining as a Tool, Not See It As a Threat

Several states are considering laws that incentivize or disincentivize the growth of Bitcoin mining. We encourage lawmakers to examine closely the studies from which they draw their conclusions about Bitcoin mining’s energy consumption. As this research study makes clear, the narrative that Bitcoin mining unnecessarily taxes the grid and raises energy prices is at best misinformed, and at worst misinformation.

Bitcoin mining is a tool for stabilizing the grid, and policies aimed at creating lower electricity prices should incentivize the industry’s growth. Bitcoin miners who use energy that would otherwise go to waste, or who participate in state-led programs to give energy control agencies more control over the grid, should be rewarded for their good behavior. Laws and regulations which amplify Bitcoin mining’s benefits are one of the easiest ways to make sure that electricity prices are kept low and energy generation is made more sustainable for communities across the United States.

Bitcoin mining is not a hindrance to a balanced grid — it’s an asset. Smart policy will embrace this innovative technology to keep the lights on and power prices low, for everyone.