Issue #014: AI vs BTC: who's best for the grid?

Last newsletter, we analyzed 5 new live charts tracking different Bitcoin ESG metrics.

This week, we tackle a topical question: what will happen to the world under two different scenarios: grids packed with Bitcoin mining vs grids packed with AI datacenters?

First some context: right now, Bitcoin mining and AI data centers are in a power struggle for power on the grid. Basically there’s not enough power and too many users wanting that power, especially in the US, where the grid has not increased in generation capacity for since 2007, that’s 17 years!

So two tribes; limited resources. Sounds like a recipe for tension right? Let’s find out.

First let’s understand each tribe. The key difference between Bitcoin mining and AI/HPC data centers is in their energy consumption patterns. Bitcoin mining can ramp up or throttle down their energy usage on a dime. This flexibility makes them perfect for balancing out the fluctuating energy supply from renewables.

On the other hand, AI data centers need 24/7 uptime. This means they're not as adaptable to the ebbs and flows of renewable energy.

---

So while AI data centers are busy crunching numbers and trying to figure out why we humans are so weird, Bitcoin miners are out there, flexing their energy consumption muscles and helping to stabilize the grid.

As we can see though in this graphic below from a whitepaper by Rhodes et al, Flexible data centers like Bitcoin mining operations help grid operators to de-carbonize grids, whereas inflexible data centers mean grid operators must build more fossil-fuel baseload onto the grid to meet their 24/7 requirements.