[stale2002]

It's not externalized costs though. It's just regular costs.

People aren't stealing that energy (well, MOST miners aren't) . They are paying real money for it.

How is spending money to buy something and then using that thing (energy in this case) an externality?

Is me leaving the lights on at my house an externality? I don't think so. Im the one paying the costs.

If you don't want to pay for crytocurrencies, you don't have to buy them.

[techsupporter]

In many parts of the world (and particularly the United States), electrical power is generated through ways that are rather unfriendly to the environment, especially when load is unexpectedly higher. Causing higher demand and, thus, more pollution, is a negative externality that the miner is pushing off onto the rest of the public.

(Yes, some exceptions apply, like buying power from system operators that are primarily based around hydro or wind power.)

[stale2002]

> especially when load is unexpectedly higher

Interestingly, this is actually the opposite situation for bitcoin mining.

Bitcoin miners are usually located right next to massive solar power plants, or hydro generators.

This way, the bitcoin miners use the excess energy, that nobody else was going to use, and they use this "free/excess" energy because it is cheaper.

There is no reason at all to run your bitcoin miner during peak capacity, when electricity prices are high. You just shut off the miners, and start them back up again during the night or something.

Bitcoin mining could even be considered a POSITIVE externality, in some situations, such as when power production is so high, that the power plants sell it for negative dollars (ie, the extra power disrupts the grid, so they need to get rid of it.).