I became interested in examining a potential relationship between bitcoin and nuclear energy when it became evident that bitcoin was consuming huge amounts of electricity and would continue to do so, as ever more complex algorithms had to be solved to earn bitcoin. Initially, the comparison was between the efficiency of bitcoin and uranium since both are related to mining. Of course, bitcoin is the output of something that uses huge amounts of electricity, while uranium is an input for nuclear power plants that produce a huge amount of electricity.
Later, it became evident that much of the electricity needed to produce bitcoin was coming from fossil fuels, raising environmental concerns. I asked around to see if bitcoin miners were purchasing carbon offsets, but that did not appear to be the case. Bitcoin’s carbon footprint became a major issue when Elon Musk, an advocate for bitcoin, pointed out bitcoin’s problem in this respect. The price of bitcoin took a hit after Musk’s pronouncement, establishing a direct link between value of bitcoin and the environment.
Growing concern about the environmental impact of bitcoin opened the door for a more direct linkage with nuclear energy. I was heartened to see that some bitcoin miners were turning to nuclear energy for not just carbon-free electricity but dependable electricity to support their operations. Likewise, nuclear operators, like Talen Energy, were approaching bitcoin producers to offer to supply them with desirable nuclear-generated electricity. This is a proverbial win-win situation in that nuclear provides steady and environmentally friendly electricity while bitcoin represents additional demand for nuclear.
The benefits of bitcoin miners using nuclear energy transcend the mere replacement of fossil fuel electricity generation that they consume. This additional benefit occurs when bitcoin producers’ use of nuclear energy helps extend the life of a reactor that would otherwise be shut down, and/or if bitcoin miners jumpstart the construction of new, smaller reactors, helping to accelerate the introduction of new nuclear energy technology. Thus, to the extent that bitcoin mining uses nuclear energy, it can turn what is a negative to a huge positive when it comes to its carbon footprint.
The nuclearization of bitcoin also affords another way for individuals and corporations to support nuclear energy. If someone wants to purchase bitcoin powered by nuclear energy (which we will call “atomcoin”), then they know at a minimum that it is not adding to carbon emissions, and it may be supplanting other carbon-producing electricity. It may not be possible to segregate bitcoin produced by nuclear energy from bitcoin produced using other sources, but this does not diminish the positive effect of bitcoin production increasing its reliance on nuclear energy.
If the past is any indication, more environmentally acceptable production of bitcoin should have a positive impact on bitcoin prices, all other things being equal. Since bitcoin is largely outside the purview of governments (although this may change over time), it represents more of a pure market response to an environmental issue. Thus, even in cases where nuclear energy may not earn carbon credits, its benefits can be monetized in other ways.
Finally, bitcoin’s interest in nuclear energy serves to highlight nuclear’s unique quality in that it provides reliable electricity like fossil fuels but has no appreciable carbon footprint. Of course, nuclear’s benefits extend far beyond bitcoin, but bitcoin’s notoriety certainly does not hurt to draw attention to these benefits.
Jeff Combs is founder, owner, and Chairman of UxC, LLC (UxC) and is a leading expert in the nuclear fuel market, with over 45 years of experience providing economic analysis and forecasting for the front-end of the nuclear fuel cycle. He has extensive and varied expertise, overseeing UxC market reports, providing strategic consulting to major commercial companies in the nuclear fuel industry, and advising governments and international organizations on market and policy issues. Under his management, UxC has grown to become the world’s pre-eminent nuclear fuel market information and analysis company, issuing reports and publishing prices for all front-end nuclear fuel markets. In 2007, UxC teamed with CME/NYMEX to introduce the world’s first uranium futures contract. That same year UxC began reporting on the backend of the fuel cycle. In 2018, Mr. Combs created the atompeace.org website to advance understanding of peaceful uses of the atom in today’s world. During his career, Mr. Combs has presented papers at a variety of nuclear industry and energy economics conferences throughout the world. In addition, he has had his work published in academic and public policy journals. Mr. Combs earned a bachelor's degree in Economics at the University of Virginia, where he also completed his doctoral course work in economics. He is a charter member of the International Association of Energy Economics and is a member of the American Nuclear Society.