As governments worry more about electricity use, Bitcoin mining is under growing pressure. Lawmakers in the United States and other countries are discussing new rules for data centers because they fear rising energy demand could increase power bills for regular consumers.

But decentralized finance and digital assets investment firm Paradigm says Bitcoin mining should not be blamed. In its latest report, the firm argues that Bitcoin mining does not harm the power grid. In fact, it says mining can actually help make energy systems more stable.

Paradigm says Bitcoin mining works very differently from traditional data centers. Most data centers run nonstop, no matter how expensive electricity becomes. Bitcoin miners do not.

Mining only makes sense when electricity is cheap. If prices rise too high, miners shut their machines down because they don’t want to lose money. This means miners naturally avoid using power when the grid is under stress.

Because of this, Paradigm says Bitcoin mining should not be grouped together with AI data centers or cloud computing facilities when governments write energy rules.

Mining is energy-intensive by design. The Bitcoin network relies on a “proof of work” system, where powerful computers compete to find the next block through trial and error. This process secures the network, but it consumes electricity.

However, miners operate under a strict “break-even price” per megawatt-hour. If electricity prices rise above that level, mining becomes unprofitable and operators shut down machines.

In cities and communities, electricity demand changes throughout the day. People use more power in the morning and evening, and much less during midday or late at night. Power grids must always stay balanced, but excess electricity during low-demand hours often goes unused and could harm the infrastructure.

“Mining operations are most effective when run during periods of low power prices,” the firm explains. They use electricity when demand is low and prices are cheap, then reduce usage when demand rises. Paradigm added:

Bitcoin mining does use a lot of electricity, but Paradigm says the scale is often misunderstood.

According to the firm, Bitcoin mining uses about 0.23% of global energy and produces around 0.08% of global carbon emissions. That is far less than many critics claim.

Paradigm also criticizes studies that measure Bitcoin’s energy use “per transaction.” Mining energy is not linked to how many payments are made, but to how the network stays secure. This makes “per-transaction” comparisons misleading.

The report also says Bitcoin mining is often powered by renewable energy like wind and solar. These energy sources produce the most power when demand is usually low. Because electricity is hard to store, excess renewable energy often goes to waste.

“Bitcoin mining is naturally driven towards cheap, abundant, and renewable electricity,” the firm writes. Bitcoin miners can use this surplus electricity. This helps renewable energy companies earn money from power that would otherwise be wasted, encouraging more clean-energy development.

In places like Texas, miners have also joined programs where they shut down during grid emergencies. This helps prevent blackouts and reduces pressure on the system during extreme weather conditions.

Some miners are part of programs that allow grid operators to control their electricity use. AI and cloud computing datacenters need to run continuously, no matter the cost. They cannot afford to shut down. However, during shortages, Bitcoin miners can be switched off quickly. During surplus periods, they can switch back on.

The load switching process is extremely fast and easy.

Paradigm says these programs save money for consumers. In Texas, the cost of certain grid-support services fell sharply after miners joined these programs.

Although it may seem strange to pay companies to turn off machines, the firm argues that the savings for the grid are greater than the costs.

Despite these arguments, political scrutiny is increasing.

U.S. lawmakers have proposed bills to stop data centers from “raising electricity prices.” Some states are considering restrictions or pauses on new mining operations. Canadian provinces have also limited new Bitcoin mining connections.

Environmental groups and some politicians say mining increases pollution and relies too much on fossil fuels. Paradigm disputes this and says many claims ignore how electricity markets really work.

Paradigm wants policymakers to rethink how they view Bitcoin mining. Instead of seeing it as a constant energy drain, the firm says mining should be treated as a “flexible demand” resource that responds to prices and grid needs.

“Bitcoin mining is not a hindrance to a balanced grid — it’s an asset,” Paradigm concludes. “Policymakers should use bitcoin mining as a tool, not a threat.”