Analysis: Can Trump leverage state-owned energy mining to increase the United States' Bitcoin reserves?

Question

Editor: Wu Says Blockchain (This article is organized using GPT)

Current Situation: Bitcoin Reserves and Trump's Energy Policy

Against the backdrop of intensified global competition for Bitcoin reserves, the U.S. government has seized approximately 200,000 Bitcoins (worth about $17 billion) through law enforcement measures and has established a "strategic Bitcoin reserve pool" to prohibit sales. At the same time, the policy direction of the Trump administration shows two core tendencies:

(1) Support traditional energy industries and advocate for reducing subsidies and constraints on clean energy;

(2) Enhance the financial competitiveness of the United States without increasing fiscal expenditures. Therefore, utilizing state-owned energy mining to increase Bitcoin reserves may theoretically align with the policy objectives of the Trump administration.

Currently, the U.S. government's energy assets mainly include decommissioned power plants, Tennessee Valley Authority (TVA) hydroelectric power, military backup power sources, and other public energy infrastructure. There is a significant amount of idle or inefficiently used power supply among these resources. If some of it can be converted into Bitcoin mining computing power, it would not only enhance asset utilization efficiency but also increase the nation's Bitcoin reserves through low-cost mining.

Feasibility Analysis

2.1 The technical feasibility of Bitcoin mining using state-owned energy

The key to Bitcoin mining lies in cheap and stable energy supply. Among the state-owned energy assets in the United States, there are a large number of potential energy resources available for mining, including but not limited to:

Retired coal-fired power plants: Many states have already closed or plan to close coal-fired power plants to comply with environmental regulations. However, some power plants still have generating capacity and can be put back into operation in the short term. Repurposing these plants for Bitcoin mining can not only enhance the utilization of abandoned infrastructure but also generate additional revenue during periods of low energy prices.

TVA Hydropower: The hydropower resources managed by the Tennessee Valley Authority (TVA) are an important part of the U.S. public energy system, providing stable, low-cost, and carbon-free clean electricity. During periods of low electricity demand, excess hydropower can be redirected for Bitcoin mining, increasing resource utilization.

Military Backup Power: U.S. military facilities and strategic reserve facilities are typically equipped with backup power systems to respond to emergencies. These backup power systems are mostly in a low-utilization state and can be utilized for mining during non-emergency periods without affecting national defense security needs.

Surplus energy from offshore oil drilling platforms: The United States generates a significant amount of associated gas (flared gas) during oil extraction. Due to high recovery costs, a large volume of gas is directly burned off, resulting in energy waste. By deploying small mobile mines on these drilling platforms and using associated gas to power mining machines, it can not only reduce carbon emissions but also convert waste gas into economic gains.

Remaining load of nuclear power plants: The United States has multiple nuclear power plants, some of which have generating capacities that exceed actual demand, especially during low electricity demand periods (such as at night or during seasonal load variations). This surplus electricity can be partially used for Bitcoin mining, thereby improving the efficiency of nuclear energy utilization without affecting grid stability.

2.2 Estimation of Mining Contribution to Bitcoin Reserves

Based on technical feasibility, assuming the United States can utilize 5-20 GW of energy for Bitcoin mining, using current mainstream mining machines (such as Antminer S 21, with a power consumption of about 3 kW and a hash rate of 200 TH/s), the theoretical hash rate can reach:

5 GW = 1.66 million mining machines = 33 EH/s

20 GW = 666 million mining machines = 133 EH/s

At the current Bitcoin network difficulty, such computing power would correspond to an annual production of about 450-1800 Bitcoins (adjusted dynamically based on mining difficulty). Even with a lower estimate, the U.S. government could significantly increase its Bitcoin national reserves through this method, thereby enhancing Bitcoin's strategic value in the global financial system without increasing fiscal burdens.

In addition, the plan can effectively utilize the existing energy infrastructure in the United States, improving the economic benefits of the traditional energy industry and promoting the compliance process of cryptocurrency assets, laying the foundation for the long-term development of Bitcoin in the U.S. financial system.

Difficulty Analysis

3.1 High renovation costs

The cost of upgrading existing energy facilities and establishing mining infrastructure is extremely high, involving multiple aspects such as power supply expansion, data center construction, cooling system deployment, and network infrastructure upgrades. According to industry estimates:

Building or upgrading power infrastructure: It may require hundreds of millions to billions of dollars, especially in cases where it is necessary to restart decommissioned power plants or expand grid capacity, and related costs may rise further.

Mining Machine Deployment and Maintenance: Assuming the deployment of millions of mining machines, the costs for purchasing, transporting, installing, and initial maintenance of the mining machines alone may exceed 5 billion USD, not including subsequent electricity costs and long-term operational maintenance costs.

Even if retired facilities are used to reduce some of the initial investment, the overall funding demand remains enormous, and there is a lack of clear financial sources. If the government attempts to support this plan through the budget or public funds, it may face opposition from Congress and the public, further increasing the difficulty of implementing the policy.

3.2 Environmental Pressure

The high energy consumption characteristics of Bitcoin mining have always been the focus of global attention, especially against the backdrop of increasingly stringent environmental protection policies. This plan may face multiple pressures from environmental organizations, policymakers, and the international community. In particular, the Trump administration has been criticized for strongly supporting the fossil fuel industry and relaxing carbon emission restrictions. If this mining plan primarily relies on fossil fuel power supply, it may exacerbate its environmental burden.

Estimates indicate that if Bitcoin mining relies on coal or natural gas for power generation, the annual carbon emissions could reach several million tons of CO₂, equivalent to the total annual emissions of millions of fuel-powered cars, which will undoubtedly provoke environmental opposition both domestically and internationally. On the international level, the United States' carbon emission performance may affect its negotiating position in climate agreements and global trade; on the domestic level, environmental agencies and clean energy advocates may pressure the government to make adjustments in energy policy.

Even if the Trump administration hopes to advance the plan, it may still need to explore certain environmental buffer solutions, such as increasing the share of renewable energy in mining, investing in carbon capture and carbon offset technologies, or setting stricter energy efficiency standards to reduce environmental resistance.

3.3 Regulation and Congressional Resistance

The U.S. Congress and financial regulatory agencies may strongly oppose the plan, mainly for the following reasons:

Should the government directly intervene in Bitcoin mining? This issue involves the fundamental framework of fiscal and monetary policy, and may trigger prolonged legislative and political disputes, potentially affecting the independence of the Federal Reserve's monetary policy.

Regulatory issues from the Ministry of Finance, SEC (Securities and Exchange Commission), and CFTC (Commodity Futures Trading Commission): The legal status of Bitcoin remains controversial, and the government's holding of Bitcoin may require adjustments to the existing regulatory framework and could even face judicial challenges.

How can the government ensure the security of its Bitcoin reserves? As a decentralized asset, the storage and management of Bitcoin face technical risks such as hacking and private key security. If a security incident occurs, it may affect the government's credibility.

In addition, Congress may question the financial feasibility of the plan, especially against the backdrop of the expanding fiscal deficit of the U.S. government, whether resources should be invested in Bitcoin mining will become the focus of intense debate.

3.4 Social Acceptance Issues

Despite the rising acceptance of Bitcoin globally, there remains significant controversy within American society. The general public's trust in Bitcoin is limited, partly due to its extreme price volatility and its past associations with illegal financial activities. Additionally, many politicians are concerned that the nationalization of Bitcoin could pose a potential threat to the dollar's status as the global reserve currency and even impact the stability of the existing financial system.

If the Trump administration wants to promote the plan, it may need to develop a comprehensive public communication strategy, including strengthening the security argument for Bitcoin as a national asset, increasing government transparency in the field, and guiding social recognition of Bitcoin through policy. Meanwhile, support from financial institutions, cooperation from legislative bodies, and appropriate government regulation will also be important factors in enhancing social acceptance.

3.5 International Controversies Arising from Concentration of Computing Power

If the U.S. government intervenes on a large scale in Bitcoin mining, leading to a significant increase in its hash power share in the global Bitcoin network, it may raise concerns in the international community about the decentralization principle of Bitcoin. Currently, the decentralized nature of Bitcoin is one of its core values, and deep intervention by the U.S. government may be seen as a violation of this principle.

This situation may lead other Bitcoin participants worldwide to take countermeasures, such as:

Policies in Europe and other countries to counteract: stricter cryptocurrency regulations may be introduced, even limiting Bitcoin trading, in order to prevent the U.S. from using its computing power advantage to interfere with the Bitcoin network.

Countries like Russia are promoting de-dollarization: Bitcoin is seen by some countries as a hedge against dollar hegemony, and excessive U.S. intervention may prompt these countries to accelerate their exploration of alternatives such as decentralized solutions or their own central bank digital currencies (CBDCs).

Therefore, although government-led Bitcoin mining helps enhance the diversification of national assets, excessive concentration of computing power may pose geopolitical risks and prompt a shift in the global market's attitude towards Bitcoin.

Conclusion

If the Trump administration wishes to increase the national Bitcoin reserves without increasing the fiscal burden, utilizing state-owned energy for mining is a technically feasible but politically and socially challenging solution. From the perspective of energy utilization, a potential available power of 5-20 GW could support an annual output of 450-1800 Bitcoins, providing a low-cost opportunity for national asset diversification.

However, the plan faces major challenges such as high upfront investment, environmental pressure, regulatory obstacles, low social acceptance, and international disputes caused by the concentration of computing power. To promote implementation, the Trump administration needs to make breakthroughs in the following areas:

Adopt green energy (such as hydropower and nuclear power) to reduce carbon emissions controversy.

Reduce direct investment pressure from the government by cooperating with listed mining companies.

Establish a regulatory framework to ensure the transparency and security of the national Bitcoin reserves.

Develop public communication strategies to enhance social recognition.

Overall, although this plan aligns with Trump's policy direction, the real challenges it faces make it difficult to implement quickly. With the U.S. government officially incorporating Bitcoin into its national strategic reserves, its implementation may require a more cautious and gradual policy approach, such as tax incentives to support private mining companies or adopting decentralized management methods to avoid regulatory conflicts.