Is Bitcoin Mining Good for the Grid? In 2021 Square and ARK Promised a Flexible Power Buyer. Today Miners Rent Their Grid Connections to AI

In April 2021 Square, Jack Dorsey's payments company (now Block), and Cathie Wood's fund house ARK Invest published a memo with a big title: "Bitcoin is Key to an Abundant, Clean Energy Future." The idea: bitcoin miners are the ideal power customer. They can switch off at any moment, they can sit anywhere, and they buy the power nobody else wants. That would make more solar and wind farms pay off.

Buying a mining stock today as a bet on bitcoin means buying this story along with it: a lever on the price, with a climate argument built in.

Five years later we can check what came true. Part of it did. The biggest part the memo did not see coming: miners now rent their grid connections to AI data centers.

The flexibility is real, but the grid barely pays for it

First, what the memo got right. Miners do switch off when power gets expensive, and they earn money doing it.

Riot Platforms, one of the largest miners in Texas, booked $56.7 million in curtailment credits in 2025 according to its annual report, after $33.7 million the year before. Riot mined 5,686 bitcoin in the same year.

Where the money comes from is the interesting part. Only $2.4 million came from the grid operators' standby programs, meaning for the right of ERCOT in Texas or MISO in the Midwest to cut Riot off in an emergency. In 2024 that was $7.7 million. The rest came from reselling power Riot had bought at a fixed price, sold in the hours when the market price spikes.

That is a good business. It is a service to the grid only at the margin.

And since June 2025, flexibility in Texas is no longer a virtue but an obligation. The law SB 6 requires every new large load of 75 megawatts or more, data centers included, to let the grid operator switch it off in an emergency.

Miners switch off when power costs more than their bitcoin, not when the grid needs them.

Whether this flexible customer helped the grid take on more solar and wind is the memo's real question.

The queue for the grid has doubled

The memo counted more than 200 gigawatts of solar and wind projects waiting for a connection in just three US grid regions. Miners were supposed to buy that power until the grid was ready.

The queue has not shrunk since. Lawrence Berkeley National Laboratory counts it every year for the whole US:

In 2024 it shrank for the first time, by 12 %, mostly because many projects were withdrawn.

Miners are not to blame for the queue. But the memo promised they would ease it, and there is no sign that they did.

The bottleneck in the grid has doubled, and mining did not clear it.

That leaves the question of whether mining itself at least grew the way the memo expected.

More computing power, barely more electricity

The memo put global mining capacity in 2021 at 10 to 20 gigawatts. A fifth of the waiting solar and wind projects alone, it said, could carry 40 gigawatts of new mining in the US.

That is not what happened. The University of Cambridge estimated bitcoin mining's power use in April 2025 at 138 terawatt-hours a year. Spread over the year, that is just under 16 gigawatts of constant load, worldwide. It sits in the middle of the 2021 range.

What grew is computing power. In the month before the memo, the hashrate, the total computing power of the network, averaged 159 exahashes per second. In the month to 27 October 2026 it was 1,027, six and a half times as much. The machines became more efficient. That took hardly any new power plants.

Mining did get greener, but not the way the memo described. According to Cambridge, 52.4 % of its power came from sustainable sources in 2025 (42.6 % renewable, 9.8 % nuclear), up from 37.6 % in 2022. The largest single source is natural gas at 38.2 %. Coal fell from 36.6 % to 8.9 %.

The network computes six times as much as in 2021, on about the same power as then.

If mining did not grow by 40 gigawatts, where are the grid connections going that miners secured over the past years?

The grid connection became the business

A grid connection for hundreds of megawatts is scarce in the US. That is exactly what miners have: land, substations, approved lines. And that is exactly what AI companies are looking for.

The contracts that came out of it:

Across all listed miners, the asset manager CoinShares counts more than $70 billion in announced AI contracts. About 30 % of their revenue already comes from AI, according to CoinShares, and by the end of 2026 it could be up to 70 %.

Core Scientific says it plainly in its 2025 annual report: it intends to convert "every megawatt" of its portfolio to data center use over the next three years.

That turns the memo upside down. A tenant on a 15-year lease with billions in graphics chips does not switch off because the power price rises at 6 pm. The connection meant for the grid's most flexible customer goes to its least flexible one.

In the end the value came not from mining, but from the connection mining secured.

"That is just a side business, mining goes on"

There is something to that. Riot ran machines with 38.5 exahashes per second at the end of 2025, more than a year earlier (31.5). Not every miner turns into a landlord.

The network numbers still show a turn. Since July 2026 the hashrate has been below its level a year earlier, for the first time since China's mining ban in summer 2021. In September it was 8 % lower on a 30-day average, at the end of October still 5 % (1,027 against 1,083 exahashes per second).

Earnings are part of it. Hashprice, the revenue per unit of computing power per day, fell to $29 per petahash in the first quarter of 2026 according to CoinShares, a five-year low. 15 to 20 % of the fleet was running at a loss. A miner who finds a 15-year tenant in that situation takes it.

Mining stays, but the power increasingly flows to where a fixed lease pays more.

That is the US picture. Close to two thirds of the computing power sit elsewhere.

Outside the US, the connection often belongs to the state

Hashrate Index, the data arm of mining services firm Luxor, estimates every quarter where the computing power sits. It works from mining pool data. That is an approximation, not a count, especially for China, where mining is banned.

In the US, Canada and the Emirates mining is shrinking because capacity is moving to AI, according to Hashrate Index. That is the pattern from above. In other countries it is not the miner who decides where its power goes, but the state utility.

In Ethiopia, Ethiopian Electric Power (EEP) supplies 39 mining companies. They brought the utility more than $300 million in the last fiscal year, about 35 % of its revenue, the weekly Capital reported on 20 September. More than 90 % of the country's power comes from hydro. When drought cut reservoir inflows by almost 20 %, EEP reduced supply to the miners from mid-September in three steps to 23 % of contracted capacity. The contracts contain no supply guarantee and no penalty. Ethiopia's hashrate fell within one quarter from about 23 to 15 exahashes per second.

That is the flexibility the memo promised. Only here it is not the miner who switches off when it pays, but the utility when the water runs short, and nobody gets paid for it.

In Paraguay the state utility ANDE sells power from the Itaipú hydro dam. 41 miners have reserved 943.8 megawatts there, 13.5 % of Paraguay's share of Itaipú. ANDE expects about $350 million from them in 2026, up from $100 million in 2024. Even so, every mining contract expires on 31 December 2027, and ANDE calls the date non-negotiable. The power is meant to go to industry and AI data centers. Gustavo Villate, the country's top telecoms official, put it in one line: "Unplug crypto and plug in AI."

The effects are already visible. Bitfarms sold its last site in Paraguay in April 2026. The operator Penguin is converting its facility in Hernandarias into an AI data center. Paraguay's hashrate is still growing, but the clock is running.

In Norway, Bitdeer shows the US version. The miner is converting its 180-megawatt site in Tydal and has leased 121 megawatts of IT capacity for 16 years to the AI infrastructure company Volta, for a contract value of $4.7 billion (filing of 5 August 2026). Here the connection belongs to the miner, so the miner collects the rent.

Russia runs the other way. Since 15 August 2026 the government has banned mining in Moscow, the Moscow region and parts of the Kursk region until the end of 2032 (government decree No. 936 of 25 July). Irkutsk has a ban until 2031. Even so, Russia's 18.1 % is the highest share Hashrate Index has measured for the country. Mining moves to regions with spare power inside Russia, and abroad to Oman, Indonesia or Pakistan.

In the US the connection belongs to the miner, in Ethiopia and Paraguay to the state. Whoever owns it collects the AI premium.

What you actually buy with a mining stock

For a long time a mining stock was a lever on bitcoin: when the price rises, earnings rise faster because costs are fixed. For a miner that rents most of its power to Microsoft or Amazon, earnings depend on leases, construction schedules and the success of its AI tenants.

Before you buy a mining stock as a bitcoin bet, four looks at the latest quarterly report are worth it:

• What share of revenue comes from mining, and what share from hosting or leasing?
• How many megawatts are leased to tenants, and how much computing power still runs for the company's own mining?
• When do the leases go live? Many of the contracts above only start in 2026, and some depend on delivery milestones.
• Where are the sites, and who owns the power contract? A site in Paraguay has a fixed expiry date, one in Ethiopia no supply guarantee.

Whether mining stocks therefore do worse than bitcoin is not measured here. What is measured is that the business behind them is shifting.

The next measurement is the third-quarter 2026 reports in the coming weeks: does the AI share of revenue rise as fast as CoinShares expects, and does the hashrate keep falling below last year's level?

Every number comes from a named source

The promises come from the memo of the Bitcoin Clean Energy Initiative (Square/ARK, April 2021). Each one is checked against a named source: Berkeley Lab for the queue, Cambridge for power use and energy mix, the miners' annual reports and SEC filings for credits and contracts, CoinShares for sector totals and hashprice, Hashrate Index for country shares, reports by Capital and The Weekly Post for Ethiopia and Paraguay, and reports by The Block and ppt.ru on the Russian government decree. The hashrate is the 30-day average of Coin Metrics daily data. ARK's model in the memo (99 % solar power with mining and batteries) is not checked here, because it is a model and the published model code could no longer be found.

FAQ

Is bitcoin mining green today? About half of it. Cambridge counted 52.4 % sustainable power in 2025, including 9.8 % nuclear. Natural gas is the largest single source at 38.2 %. The basis is a survey of 49 companies covering just under half of all mining.

Did miners switching off help the Texas grid? It relieves the grid at price peaks. It is paid for mainly through reselling fixed-price power, though. At Riot, only $2.4 million of $56.7 million in 2025 came from the grid operator's standby programs.

Are the AI contracts safe? No, they are contracts with conditions. Many only begin in 2026 and depend on construction and delivery dates. The value in the table is the agreed value over the base term, not booked revenue.

Not investment advice, not a recommendation, not a forecast. Historical patterns are no promise.

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