Bitcoin can be supported by both Republicans and Democrats

Bitcoin is a brand-new and improved kind of currency

In truth, it won’t be altruism that brings together violently split left- and right-wing politicians in support of the technology. Rather, Democrats and Republicans will welcome Bitcoin because it will create jobs — notably high-paying ones in the heartland and rural America.

If you’re new to Bitcoin, you might be wondering why this is. Understanding what Bitcoin accomplishes, why it counts, and how it differs from other cryptocurrencies is challenging, and for some, like myself, it’s been a lifelong quest.

Simply defined, Bitcoin necessitates the use of electricity. Bitcoin is a genuinely decentralized monetary system that allows anyone in the world to perform the compute required to keep its global database of transactions up to date.

This energy could have been delivered a decade ago using a graphics card (such as the one in your gaming machine) or a laptop (such as the one you’re reading this article on), and the Bitcoin you received would have been worth very little. In 2010, the 50 BTC you got for adding a block to the ledger might have only gotten you $50.

However, this is no longer the case. Bitcoin has gotten more valuable as it has grown in popularity. Today, individuals that mine Bitcoin blocks receive 6.25 BTC, which is worth $250,000, a value that encourages advancements in the Bitcoin mining industry.

This has encouraged entrepreneurs in the United States to do what they’ve always done: seize opportunities to develop profitable firms. Nonetheless, it is becoming evident that the types of enterprises that Bitcoin entrepreneurs are starting are unique in our economy.

Take a peek at the graph below to see how new Bitcoin mining operations are distributed. It doesn’t take much to notice how this differs from the typical Silicon Valley unicorn or Wall Street upstart’s employment profile.

 

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We’ve watched this transformation personally as co-authors of a new book on Bitcoin policy, and we have to admit, it’s astonished us to see the vast number of public U.S. corporations that are now mining Bitcoin and supporting our electrical grid.

We outline how Bitcoin is making new types of energy generation affordable, revitalizing American towns, and rewarding the use of previously squandered energy in the following piece, which is an excerpt from our book, Bitcoin and the American Dream.

 

Bitcoin Revitalizes Industry and Creates Jobs

The demise of local manufacturing is a serious concern in gritty, proud blue-collar communities across middle America.

Manufacturing employed one-fifth of all Americans at the start of the 1980s. More importantly, it sustained the livelihood of one-third of American men aged 21 to 55 who only have a high school diploma or less.

Since the turn of the millennium, Georgia, Indiana, Michigan, Minnesota, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, West Virginia, and Wisconsin have lost 5.5 million jobs.

For far too long, this has been an issue for America’s middle class with no solutions.

Presidents of both political parties have made the quest to replace these jobs an unfulfilled priority. Foreign competition, costly regulation, technical automation, and corporate outsourcing are all blamed by politicians, but for Rust Belt Americans, there has been much too much discussion with far too little improvement.

There is, however, reason to be optimistic. Bitcoin is in a unique position to address this issue. Its industry thrives in communities that domestic manufacturers have long abandoned.

 

Bitcoin mining is a multibillion-dollar industry

Bitcoin mining is a method of securing the monetary network by using a large number of specialized computers. The business is not dissimilar to that of large-scale data centers. Miners are responsible for generating the computations required for Bitcoin’s functioning and security, as well as receiving new money created by the software. They encrypt transactions and store them on a worldwide public ledger that anybody can check.

 

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Bitcoin miners use a lot of electricity, and they use a lot of it. The energy requirements are comparable to those of auto plants or smelting plants. As a result, the factories of the Rust Belt are proving to be a desirable location for these companies.

This is a noteworthy pattern. There is currently no other industry that has a competing vision for reviving these deactivated facilities.

Unlike today’s manufacturers, who are specializing to reduce job losses, Bitcoin miners require a wide range of workers. Equipment repair and facility administration are the most common jobs. Construction, HVAC, and electrical engineering, as well as finance, sales, and marketing, may be required.

Bitcoin-related jobs are also well-paying. Salary averages around $108,000 per year in this industry. This might go a long way in locations where manufacturing jobs are desperately needed.

 

Manufacturing Towns Rebuilding

The small town of Rockdale, Texas, is a perfect illustration of how Bitcoin mining can revitalize a community. When one of the nation’s leading aluminum smelters, the town’s main employer, closed, Rockdale was heavily damaged.

Today, the situation is very different.

This former manufacturing town had exactly the right amount of electricity for Bitcoin mining. Riot Blockchain, a publicly traded firm, was inspired by this infrastructure to establish a brand-new 300-megawatt mining plant in the town.

Riot is creating 500 bitcoins per month ($22 million) at this plant as of 2021, with 200 construction workers committed to the project.

Riot is extending its operations, buoyed by its success. As the firm grows, it plans to expand its Rockdale facilities and create additional local jobs.

 

Renewable Energy Promotion

Concerns about the demand Bitcoin miners make on our important national electrical grid balance out the optimism about employment creation in rural America. Many swing-state independents are concerned about environmental justice and climate change.

 

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However, the facts about Bitcoin mining contradict detractors’ claims.

Bitcoin is not reliant on the source of its energy. There is nothing in the mining equipment that requires coal or oil to operate. Miners are also portable, allowing them to access previously untapped green power sources. If a company in the United States wishes to develop a new plant to harvest unused wind, hydroelectric, or solar energy, they can now mine Bitcoin to recoup costs before connecting to the grid.

Because a lot of renewable energy isn’t portable, energy costs vary a lot depending on where you are and when you use it. Wind energy outside of Fargo is less valuable than wind energy outside of Chicago, and solar energy in the afternoon is less expensive than solar energy in the morning.

Miners, on the other hand, are extremely adaptable. To sell Bitcoin on the global market, miners only need an internet connection and a source of energy.

This is already having a significant impact. According to a report from 2021, 57 percent of all Bitcoin mining in the United States is done utilizing renewable energy sources.

 

Stabilization of the Grid

Bitcoin mining provides a guaranteed consumer, which helps to fund the construction of renewable energy plants.

Miners can balance out the unpredictable energy supply from renewables like solar and wind once they’re connected to the grid. They are prudent energy consumers, mine bitcoins when demand is low and serve the grid when demand is high. Other electrical users will not experience rolling blackouts as a result of this. This is referred to as a “controlled load resource” by utilities, and miners are a large-scale, fast-responding resource.

Bitcoin mining and gas turbines both bridge the supply-demand gap, but gas turbines do so by increasing supply, whilst Bitcoin miners do it by lowering demand.

Mining funds the initial buildout of renewable energy generation prior to grid connection, and it continues to fund the utility’s operations once linked.

This solves one of renewable energy’s biggest problems: balancing supply and demand.

 

Energy that has been stranded

Even more promising is how Bitcoin mining reduces the cost of investing in stranded and renewable energy for businesses and consumers.

Bitcoin miners can set up shop near power plants, capturing energy that would otherwise be lost. Because there is no cost-effective means to transport the energy to where it might be utilized, this is referred to as stranded energy.

Flare gas is an example of stranded energy. Petroleum wells are commonly found in isolated rural regions, with no pipelines to deliver the gas to the market. As a result, most manufacturers vent or flare the gas into the atmosphere, creating pollution and squandering an energy source.

Because Bitcoin miners are portable, they can run on flare gas, which has already spawned a cottage industry. Bitcoin is mined by corporations employing shipping containers and tractor trailers loaded with specialized equipment. These can mine Bitcoin at a remote oil field, even if it’s surrounded by snow, farms, or desert.

As an alternative to risking water table contamination at landfills, dairy and pork farms are even repurposing animal waste, processing it on-site and using the energy to mine Bitcoin. This naturally occurring methane product, which emits a significant quantity of greenhouse gases, is now being used as a mining fuel. Mining, by utilizing an underutilized stranded resource, might help America’s farmers, an industry known for its razor-thin profit margins.

In sum, Bitcoin has given America’s stranded energy a new lease on life. It has the potential to deliver cash to rural areas while also upgrading our electricity system and decreasing pollution if supported by good policies.

 

Bitcoin Mining Alternatives

Not only is the environmental impact of Bitcoin mining a common myth.

Many lawmakers want to promote the development of alternative cryptocurrencies since they require less energy. While these aspirations are admirable, the investors that finance these networks have a poor understanding of Bitcoin’s design and the consequences of these changes.

Bitcoin is decentralized, as stated earlier in this book. No one has a distinct advantage over anyone else. This is in stark contrast to our current financial system, which favors gatekeepers and the rich.

The open market competition for Bitcoin facilitated by proof-of-work, the consensus technique that necessitates Bitcoin mining, is critical to Bitcoin’s decentralization. Anyone from anywhere in the world, whether a farmer in rural Iowa or an aspiring stranded energy producer in distant Alaska, can mine Bitcoin using proof-of-work.

All that is required of miners is that they follow the rules and contribute computation.

Alternative models eliminate this system, obviating the demand for energy, while also failing to produce jobs or stabilize our energy grid. These systems, like our old banking system, have many of the same flaws, but with new gatekeepers.

 

Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.

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