## Wasted Energy - The New Gold Mine for Bitcoin Miners

In industrial history, factories have always moved based on three factors: cheap labor, convenient ports, and market access. But Bitcoin has rewritten these rules. Today, when miners choose a location, the question is no longer "where are cheap workers?" but "where is the cheapest wasted kilowatt?" This shift has created a completely different economic map, where data centers are not concentrated in major cities but in places with excess energy and negative electricity prices.

Unlike heavy industries that require labor and transportation, Bitcoin mining needs only three things: a warehouse, a small IT team, ASIC machines, and an optical fiber connection. The product? Fully digital—Bitcoin block rewards don’t need to be transported, just data transmitted. This allows miners to connect directly to energy sources that traditional factories avoid: curtailed energy, wasted energy, or excess renewable energy that the grid cannot absorb.

## Cutting Costs Becomes the Essence of the Electron Economy

In California, CAISO (California Independent System Operator) had to cut about 3.4 TWh of solar and wind energy in 2023—up 30% from 2022—and this number reached 2.4 TWh in the first half of 2024 when noon production often exceeds demand. That’s when something strange happens: electricity prices go negative—generators pay to have their power taken by the grid because shutting down is too costly.

At this moment, miners appear as a perfect solution. Riot Blockchain in Texas earned about $71 million in electricity credits in 2023 simply by turning off machines during peak hours—an amount even larger than their profits from mined BTC. In 2024, this figure increased to tens of millions of dollars, and it’s projected to surpass $46 million in just the first three quarters of 2025.

Soluna builds modular data centers right at wind and solar projects to absorb megawatts that the grid cannot consume. Crusoe Energy even brings mobile generators to oil wells, using associated gas that would otherwise be flared. But the key point is: anyone who appears at the right place, at the right time, when electricity is cheapest, can profit from this negative electricity—effectively a real subsidy for mining.

## Hash Rate Moves Faster Than Any Factory

Once, Chinese miners moved seasonally: chasing cheap hydropower during the rainy season in Sichuan, then switching to coal regions when the rains ended. When Beijing cracked down in 2021, this flexibility spread globally. US hash rate grew from a small share to 38% by early 2022, Kazakhstan surged to 18%, and in 2024, US mining pools are mining over 41% of Bitcoin blocks. Recent reports show China’s market share quietly recovering to 14%, concentrated in provinces with surplus energy.

ASIC machines differ from steel mills how? They depreciate over 2-3 years, creating the same virtual asset regardless of location, without requiring labor, transportation, or port access. When Kentucky exempts crypto mining electricity from sales tax, or Bhutan offers long-term hydropower contracts, miners can relocate within months. Hash rate becomes a “footloose electron,” capable of flowing to anywhere with cheap kilowatts and friendly policies.

## Three Conditions for a Bitcoin City

US miners are concentrated in Texas, Southeast, and the Western mountains—areas where renewable energy curtailments create excess at low prices. But not every place is suitable. Three new conditions attract miners: **cheap or abandoned energy, unrestricted transmission (or private energy contracts), and local policies welcoming or ignoring them**.

ERCOT considers large loads like miners as “controllable loads”—they can be curtailed within seconds to stabilize frequency. Lancium and other mining facilities pledge to reduce load immediately when prices spike. This provides the grid with additional buffer capacity to call upon when supply is tight, while the grid absorbs more renewable energy without building new transmission.

Bhutan earns money from hydropower via hash. El Salvador packages geothermal plans and Bitcoin City into fiat currency. Kentucky exempts sales tax. Governments are rewriting auction rules to attract these digital assets: tax exemptions on electricity, fast connections, long-term power purchase agreements for curtailed energy, and in some cases, even experimenting with digital fiat.

## Reusing Heat: The Second Revenue Stream

MintGreen in British Columbia channels mining heat into regional heating systems, claiming to replace natural gas boilers. Kryptovault Norway redirects heat to dry wood. MARA experiments in Finland, where a 2 MW facility inside a heating plant provides high-temperature heat as an alternative to biomass or gas.

A low-cost electricity miner not only makes money from BTC but also sells waste heat. Two revenue streams from the same energy input. This makes cold climates with heating needs an attractive new destination for mining farms.

## AI Works Similarly, But With Limitations

The US Department of Energy warns in 2024 that AI-driven data center demand could add tens of gigawatts of new load. Companies like Soluna promote themselves as “modular green computing,” capable of switching between mining tasks and other cloud workloads to profit from curtailed renewable energy.

But the way AI electron configurations differ from Bitcoin’s in a key point: latency and SLA. A Bitcoin miner can tolerate hours of downtime and network delays of a few seconds. An AI endpoint serving real-time queries cannot. This will keep top-tier AI tasks close to major cities and fiber hubs, but batch training and inference are prime candidates for remote, energy-rich regions.

China’s new offshore underwater data center, operating around 24 MW, is almost entirely powered by offshore wind, with seawater cooling—an AI model that can mimic this, but only for workloads tolerant of high latency.

## The Industrial Map Is Being Redrawn

In two centuries, industrial geography has been optimized around cheap labor and ports. The Bitcoin boom is the first time we have a global, capital-intensive industry, fully digital products, and the main constraint being energy prices.

This reveals that: the world’s amount of “wasted kilowatts” and how much governments are willing to pay—via tax incentives, priority connections, political capital—to turn those kilowatts into hash rate.

If AI adopts the same flexibility, future data center maps will be drawn less by where cheap labor is and more by where electrons are abandoned, cooled water, and quiet permitting processes.

Factors that could change this: expanding transmission could erase the advantage of curtailment; reversing policies could trap billions of dollars; latency requirements for AI could limit mobility; and commodity cycles could completely collapse the hash rate economy.

But the trend is clear. Governments are rewriting rules to prioritize “energy plus machines” over labor. From Texas to Bhutan, from Kentucky to El Salvador, the world map is being redrawn not by humans, but by kilowatts.