| I've had a contrarian thought about Bitcoin and energy lately. I am not convinced it's right so it's just a speculation. A lot of people have scratched their heads about Elon's backing of cryptocurrency while at the same time apparently being concerned about climate change. What if it actually does make sense? What if increasing energy demand actually will help transition toward lower carbon emissions? When demand is stable or falling, industries become very conservative. Why invest in anything new if demand is static? Just run that old clunky coal burner plant as long as possible. But if demand is rising you have to expand. That means deploying new stuff. What new stuff do you build now? Well there's gas, which is mostly lower carbon than coal, but most new capacity being built is solar and wind. So you build that, then you build storage to back it. Once that's done, then why invest more money in stringing along those ancient coal burners? |
If you create net new demand then fill it with renewables you haven't reduced emissions at all because the coal plants are still running.
In theory, higher demand can make new tech cheaper due to economy of scale but the effect isn't linear; it's probably like an S-curve. Where are renewables on that scale? Are they already large enough that diminishing returns are kicking in? How much crypto energy demand would move renewable costs? Would it need to be 10% of existing usage? Higher? Lower?