Bitcoin Basics
Nov 21, 2023

Why Bitcoin Uses Electricity and Why It's a Good Thing: Unraveling the Connection Between Energy Consumption and A Better Monetary System

Delve into the world of Bitcoin's energy consumption and learn how this feature contributes to a better world

Why Bitcoin Uses Electricity and Why It's a Good Thing: Unraveling the Connection Between Energy Consumption and A Better Monetary System

Bitcoin, the world's native internet money, has often been criticized for its significant energy consumption. However, this electricity usage is not without purpose. In this article, we'll explore why Bitcoin uses electricity, how it strengthens the network's security, and the positive implications of its energy consumption for the future of the world.

Proof-of-Work: The Backbone of Bitcoin's Security

At the core of Bitcoin's energy consumption is the proof-of-work (PoW) consensus algorithm. PoW requires miners to solve complex cryptographic puzzles to validate transactions and create new blocks. This process demands substantial computational power and, consequently, electricity. The more energy the network consumes, the more secure it becomes against potential attacks, such as 51% attacks. In essence, the energy consumption serves as a protective barrier, ensuring the integrity and stability of the Bitcoin network.

The Importance of Network Effects

Bitcoin's energy usage has led to the establishment of a robust and secure network that is difficult to replicate. Copycat cryptocurrencies lack the vast network of miners, nodes, developers, and liquidity that Bitcoin has accumulated over the years. This massive network effect is one of the key factors that set Bitcoin apart from other cryptocurrencies, making it the dominant force in the digital currency space.

The Bigger Picture: Bitcoin's Energy Use and Its Potential for Human Flourishing

Despite the concerns surrounding Bitcoin's energy consumption, it is essential to consider the broader implications and potential benefits of this technology. Bitcoin's energy use may be enormous, but it holds the key to revolutionizing monetary systems and the way we harness energy worldwide.

A Better Monetary System

At its core, Bitcoin represents a superior technology for central banking compared to current government monopolies. Throughout history, advancements in technology have led to increased energy consumption, as people have found the benefits of these new technologies to be worth the additional energy costs. Today, Bitcoin users worldwide choose to invest in this technology because it offers a better, decentralized alternative for money.

Transforming Energy Economics

Bitcoin mining is unique in that it is the only profitable use of energy that does not require proximity to human settlements. This means that remote, underdeveloped areas rich in renewable energy sources can monetize their natural resources by generating clean energy and using it for Bitcoin mining.

For example, hydroelectric power generated in isolated locations can be used for mining, which can help build infrastructure and promote development in these areas. This could eventually lead to new settlements, roads, housing, schools, and hospitals, fostering human flourishing.

Creating Location-Independent Energy Solutions

The world has never before had a profitable use of energy that is location-independent. Bitcoin mining can tap into untapped renewable energy sources worldwide, which would otherwise be cost-prohibitive to connect to the grid. Moreover, since fossil fuels are too expensive for Bitcoin mining, the future of mining will likely be powered by hydroelectricity and other renewable sources.

A Future with Bitcoin-Driven Clean Energy Infrastructure

As Bitcoin continues to finance the development of clean energy infrastructure, more people may begin to live near abundant, low-cost energy sources. This shift can lead to increased human flourishing, as cheap energy is a key driver of progress and well-being.


Bitcoin's electricity consumption is an essential aspect of its network security and overall value. As the network continues to evolve and adapt, the efficient use of energy will become increasingly important, reinforcing the positive relationship between electricity usage and the long-term success of Bitcoin.

Beyond the revolution in monetary policy that Bitcoin represents, it may also serve as a catalyst for the development of abundant, clean, and affordable energy. By transforming the economics of energy and promoting the use of renewable sources, Bitcoin has the potential to significantly impact human flourishing worldwide. Embracing this technology, despite its current energy consumption, could lead to a more sustainable and prosperous future for all.