Bitcoin mining, often misunderstood as a waste of computer power, is, in reality, a fascinating intersection of technology, energy, and economics.
Forget what you think you know about bitcoin mining; the real story of Bitcoin’s proof-of-work system is far more tangible and, frankly, mind-bending.
We recently watched a discussion with Kent Halliburton, co-founder and CEO of Sazmining, who laid bare astonishing insights and truths about the industry.
For anyone not deeply familiar with the mechanics behind the world’s leading cryptocurrency, these five facts will undoubtedly shift your perspective.
1. Bitcoin and Energy Could Replace “Dollars Per Barrel”
Most people view Bitcoin as purely digital, but Halliburton argues it’s intrinsically tied to physical energy.
Source: https://imgur.com/a/Fyb4Yet
He envisions a future where energy cost, not just price, defines Bitcoin’s value:
“Sats per kilowatt hour is going to become a meaningful metric for the first time in human history. It’s not going to be dollars per barrel anymore. It’s going to be sats per kilowatt hour, because that’s the fundamental thing that actually makes it a viable form of money because it ties it back to the laws of physics.”
This perspective fundamentally explains Bitcoin’s value proposition, money that is hard to produce and hence provides a reliable store of value. The mining process requires physical energy, grounding bitcoin in the immutable laws of the universe.
2. Bitcoin Mining is a Global Manufacturing Operation
Another perspective Halliburton shares is that bitcoin mining is a fungible manufacturing operation that’s decentralized. Unlike traditional goods that need to be shipped and assembled, Bitcoin’s “production” is completed right at the energy source.
“Bitcoin mining is just a manufacturing process, and what it does is it consumes the power right on site and the manufacturing operation is complete,” Halliburton explains. “And so, in that regard, it’s the most fungible manufacturing operation that exists in the world.”
This makes Bitcoin unique among global industries, always seeking the cheapest energy to produce its final, highly liquid product.
3. Bitcoin Mining Rescues Wasted Energy and Boosts National GDP
Far from being an energy hog, Bitcoin miners are often energy saviors. They seek out the cheapest, often stranded or excess power that would otherwise go to waste, turning it into economic value for nations.
Japan has started a national Bitcoin mining initiative to utilize surplus renewable energy and balance load on the electrical grid.
Halliburton cites the example of Paraguay: “The Itaipu Dam produces 14 GW, and Paraguay only consumes about 3 GW. The rest of it was being sold at a loss to Brazil. We are essentially helping them to repatriate that electricity that was being generated in their own country and providing an uplift on the entire GDP of the country.”
This isn’t just about cheap power; it’s about monetizing unused national resources and creating economic opportunities where none existed before.
4. Mining is Often the Cheapest and Safest Way to Acquire Bitcoin
For many, buying Bitcoin means dealing with exchanges and market volatility. Halliburton proposes that mining offers a superior, more stable acquisition method—a “substantial discount” compared to market prices.
“Mining it provides a substantial discount to buying it on an exchange. Number two, it provides essentially what we like to call wild sats,” says Halliburton. He elaborates on the third benefit: “Number three is that the price is locked because hardware and electricity prices are fixed. With mining there is less volatility, you just buy a piece of hardware, you set it, you forget it, you know it’s gonna stream Bitcoin.”
This “dollar-cost averaging” approach through mining-as-a-service removes much of the emotional and financial risk associated with market timing, offering “wild sats” outside traditional financial systems.
5. Mining Leaves Behind Infrastructure That Enables Future Industry
Bitcoin mining doesn’t just consume energy; it frequently acts as the necessary anchor client that justifies major infrastructure investments in remote locations. This investment has a lasting impact beyond the life of the mining operation itself.
“When we’re done, we leave behind the substation, the transformers, the transmission lines. We leave behind all the infrastructure that enables a future heavy industry to come in and utilize that power. We are essentially the anchor client for a future industrial park.”
By creating demand and providing initial revenue, Bitcoin miners establish the power infrastructure that paves the way for other industries, transforming stranded energy into a hub for future economic development. This could enable entire regions to prosper for years and help shift humanity upwards on the Kardashev scale.
