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Potential implications of a dynamic between Bitcoin mining and nuclear energy

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A brief introduction to nuclear energy

The nuclear energy generation process starts with nuclear reactors splitting uranium atoms, stored in a solid form of fuel. This process — called fission — releases newtons and an immense amount of heat.

Firstly, neutrons collide with other uranium atoms, causing them to split and starting a chain reaction that generates ever-more heat.

On the other hand, the heat released by the chain reaction of uranium atoms splitting is used to convert water into steam, which spins a turbine that generates electricity.

The nuclear energy production process is clean, as it uses uranium instead of fossil fuels nor does it involve any direct carbon emissions into the environment.

Additionally, nuclear plants never sleep. They are built to withstand extreme weather and run non-stop, constantly supporting the grid and shutting down only for scheduled maintenance.

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So why isn’t nuclear energy more popular? This technology often receives backlash from the media and general public. The causes behind this negative portrayal are often related to isolated accidents involving nuclear power plants.

Why nuclear energy is ideal for Bitcoin mining

Contrary to popular belief, nuclear energy is safe, clean, and extremely reliable. Additionally, it’s among the most cost-effective and economic energy sources we have.

The characteristics of nuclear energy are very attractive to Bitcoin miners for many reasons. Let’s dive deeper into some of them.

Clean and carbon-free electricity

Just like nuclear energy, Bitcoin mining has also faced criticism because of the environmental impact of using fossil fuel energy, which is carbon-intensive.

Although some stages in the nuclear energy production process imply carbon emissions — building the nuclear plant or extracting and refining the uranium, for example — , the generation process per se is carbon-free.

Cumulative CO2 emissions avoided by global nuclear power in selected countries, 1971–2018 (Source: IEA, Paris)

This puts nuclear energy among the cleanest and most environmentally friendly energy sources. As such, Bitcoin miners are turning to nuclear energy, putting an end to the pollution and environmental impact debate on Bitcoin.

Reliability and uptime

Perhaps the most important disadvantage of renewable energy is its inconsistency.

Depending on weather conditions, geographical location, and time of the year, renewable energy generation can range widely. Additionally, as output varies, so does price and uptime.

These circumstances make it very hard to accurately predict and calculate mining profitability, thus causing great uncertainty for miners.

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Nuclear facilities, on the other hand, have the highest capacity factor of any other energy sources.

Capacity factor refers to the ratio between the energy produced in a period of time compared to the energy that could’ve been produced during the same period at maximum performance and optimum conditions.

Furthermore, nuclear power plants tend to require less maintenance and are designed to operate uninterrupted for extended periods before refueling.

These capabilities allow nuclear plants to function practically 24/7, which makes them the most reliable power source there is.

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Cost-effectiveness

The energy generation process is long and complex, and it involves many stages. The diversity of all these aspects often makes it difficult to compare different sources of energy, as their processes may vary significantly.

Levelized cost of energy (LCOE) is a metric that calculates the present value of the total cost of building and operating a power plant over an assumed lifetime.

This method allows the comparison of different sources — wind, solar, natural gas, nuclear — of unequal lifespans, project sizes, different capital costs, and capacities, among other factors.

That said, the International Energy Agency stated in a report (2020) that nuclear is the low-carbon technology with the lowest cost. Only hydroelectric plants are comparable in terms of cost and generation.

Levelized cost of energy (LCOE) of different energy-generation technologies (Source: IEA)

More importantly, because of technological advancements and learning curve progression, the report estimates that nuclear energy is the most economical and cost-effective technology in the long term.

Electricity produced from nuclear long-term operation (LTO) by lifetime extension is highly competitive and remains not only the least cost option for low-carbon generation — when compared to building new power plants — but for all power generation across the board.

— International Energy Agency (2020)

Low electricity prices are the main priority of Bitcoin miners, as it is the most significant factor in mining profitability. As a result, the long-term viability and decreasing costs of nuclear energy most attractive for Bitcoin miners.

How to calculate your Bitcoin mining electricity costs

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A unique opportunity for a Bitcoin mining and nuclear energy dynamic

Nuclear energy facilities can also enjoy several benefits from a partnership with Bitcoin miners.

Renewable energy sources — like solar and wind — are gradually gaining ground due to their popularity and declining costs. Natural gas prices are also trending down, which makes it another competitor to nuclear energy.

The decrease of U.S. nuclear power generating capacity is a result of historically low natural gas prices, limited growth in electricity demand, and increasing competition from renewable energy.

— Suparna Ray, U.S. Energy Information Administration

Nuclear reactors are among the most powerful energy generators. A typical nuclear plant produces 1 gigawatt of energy — that’s the same as 3.125 million solar panels.

However, the advancement of these technologies and the trend for domestic energy production have led to a decrease in demand for nuclear energy, as it’s being replaced by other sources.

Photo by Jeremy Bezanger on Unsplash

As a result, nuclear reactors are shutting down worldwide. This is where Bitcoin comes in.

Bitcoin mining requires significant amounts of energy. One single ASIC miner consumes over 3kW/h. That said, large Bitcoin mining operations of tens of thousands ASIC miners can provide the much needed demand for nuclear energy to keep reactors in business.

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Another option for nuclear energy producers is to mine on their own. They can deploy ASIC miners on-site and run their mining operations themselves, using their own low-cost energy to provide security to the Bitcoin network while turning a profit.

While Bitcoin miners obtain cheap, clean, and reliable energy, nuclear facilities gain a large sector of the market and a constant, loyal customer for their electricity.

Bitcoin mining is changing everything we know about energy. First it was renewable technologies. Now, nuclear facilities are starting to realize Bitcoin’s potential benefits for the energy industry. Hopefully, more energy producers will follow.

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