Crypto investment firm Paradigm is challenging the notion that Bitcoin mining is a static energy drain. In a recent research note, they argue that miners function as flexible grid demand, responding to price signals and grid conditions.
Paradigm's Justin Slaughter and co-author Veronica Irwin question several common assumptions used in energy modeling. They point out that measuring Bitcoin's energy use on a per-transaction basis is misleading, since mining energy consumption is tied to network security and competition among miners, not transaction volume.
The researchers also dispute the idea that energy production is effectively limitless or that miners will continue operating regardless of profitability. In competitive power markets, economic incentives drive operational decisions, they argue.
According to Paradigm, Bitcoin mining currently accounts for about 0.23% of global energy consumption and about 0.08% of global carbon emissions. The network's fixed issuance schedule and declining mining rewards constrain long-term energy growth through economic incentives, occurring approximately every four years.