From Steam to Sats: Energy and Bitcoin Strategy to Win the 21st Century

Background

The intersection of thermodynamics and economics is the realization that nearly all metrics of quality of life can be simplified to ever-increasing energy expenditure per capita. From horses to coal to fossil fuels, the efficient development and consumption of these fuels led the relatively small nations of Western Europe to transform into civilization-defining super and hyperpowers that have culminated in our 21st-century American experience.

This American way of life—and the quality of life it provides—is currently under siege by the ascendant Axis of Autocracy and its formalizing Brazil, Russia, India, China, South Africa, et al (BRICS+) alliance against the Western liberal financial system. The downstream effects of this strategic challenge are seen in daily life across the United States, with supply chain bottlenecks, inflation, and rising debts and energy prices among a myriad of resultant and related social ills. Electricity prices, in particular, have been rising greatly in the United States, and the American power grid is an extremely complex system-of-systems that is under siege simultaneously by both the insatiable demands of hyperscaler data centers running artificial intelligence (AI) models and the threat of foreign actor meddling.

The solution to all of these challenges is Bitcoin.

Bitcoin Mining for Grid Optimization

The understanding that the United States’ power grid needs a massive overhaul and expansion appears to have entered public consciousness. This scaling is already causing shuttered plants to reopen, and the nuclear power debate has finally receded to recognizing that nuclear generation is the ultimate path forward. These nuclear plants, and others, operate 24 hours a day, seven days a week, as the frictional costs of starting and stopping are too high. Bitcoin mining and miners can absorb the peaks and flatten the valleys in power demand, optimizing the performance of the American power grid to deliver uninterrupted electricity when and where it is needed. It is far easier to shutter and start mining rigs than to supply power.

The United States Army recently revealed the Janus Program, a next-generation nuclear power system to power military installations. Similar to civilian demands, military installations will experience peaks and troughs in demand that can be smoothed by public and/or private Bitcoin miners. This concept has already been floated by French politicians who are considering redirecting nuclear generation surpluses into cryptocurrency mining rather than traditional export sales to Germany.

Bitcoin Mining as a Strategic Advantage

Winning the 21st century is, and will further be, based on digitalization at scale, just as winning the 20th century was based on industrialization at scale. Artificial intelligence models have already outpaced hardware capabilities, and order backlogs at electrical grid suppliers measure in years. The Washington, D.C. establishment understands the importance of winning the artificial intelligence technology race with legislation for the CHIPS and GENIUS Acts, as well as the recent partial federal acquisition of domestic chip maker, Intel. These are unquestionably the right steps as winning the AI race and its impending merger with humanoid robotics will determine 21st-century hegemony.

It is now important to take these positive steps further and utilize Bitcoin mining as a means of securing American national security. Both public and private mining can unite to ensure that the majority of the global Bitcoin hashrate remains in the United States. This ensures that network control is grounded in small, free enterprise miners, rather than potentially being deceptively controlled by an opaque authoritarian regime. Space Force Officer Jason Lowery has called for a “strategic hashforce” to compete in an electrically based digital world. He notes that traditional competition and kinetic warfare are outdated, given the hyper-destructive nature of nuclear warfare and the doctrine of mutually assured destruction (MAD). This view is shared by the author, who also notes that while competing to gain strategic access to Bitcoin, the United States can also build and fortify the Strategic Bitcoin Reserve (SBR) as created by the current administration. This means that the inherent stock-to-flow advantages of the Bitcoin design will further enrich the United States, make the sovereign debt level more manageable, and ultimately lead to triumph over our peer competitors.

American adversaries already understand the potential of cryptocurrency mining and its impact on the electrical grid. Reports of Chinese targeting of American critical infrastructure have been reported for years; however, a recent 60 Minutes report highlighted that China has been building cryptocurrency mining data centers, illegal in the People’s Republic of China itself, in the United States with the dual capacity to conduct espionage and have the latent ability to disrupt the electrical grid. This problem is worsened by the fact that the mined Bitcoin is likely sent to Chinese-controlled wallets. This is of dual concern for the American economy and overall national security.

Recommendations

Below, I detail actionable steps that should be taken immediately to ensure American dominance of the 21st century.

Public-Private Partnerships for Grid Optimization through Bitcoin Mining

Bitcoin miners are eager to utilize cheap and abundant electricity—especially during periods of off-peak load for other applications. The Departments of War and Energy already understand the importance of energy in winning the AI race (not to mention other emergent high-demand needs such as electric cars), and Bitcoin mining can sit adjacent to this buildout to absorb excess and/or off-peak capacity. Project Janus was previously mentioned, and this is an excellent example of how excess electricity generated from military base-scale nuclear reactors can be cheaply sold to Bitcoin miners. This could even be further incentivized, as Bitcoin miners may pay a “sat tax”, which would be a production tax paid directly in Bitcoin, back to the government for the privilege of cheap sovereign power, which can then further fortify the SBR.

Encouragement of the Chinese Divestiture of Bitmain

Bitmain is the world’s leading manufacturer of Application-Specific Integrated Circuit (ASIC) miners, with a dominant market share of around 80 percent. It is also a Chinese company, so there is an understandable conflict of interest; however, a potential solution exists. The recent discussions of TikTok ownership changes and Intel public ownership examples offer very appealing solutions. In fact, the author’s recommendation is a combination of both solutions.

The Trump administration should demand that Bitmain become an American-owned company, given that most of the world’s hashrate is already based in the United States. The TikTok model could be pursued once again. There are already some steps in a positive direction as Bitmain will be placing a factory in either Texas or Florida to avoid the impact of tariffs. The author argues that the United States government should demand and purchase a significant equity stake in Bitmain. This would enable the United States to fully pursue Bitcoin mining as a national strategic imperative, as outlined in this article. Then the United States could appoint several American patriots to the board and management to uphold American interests.