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

Editor | Wu Says Blockchain

This article is organized using GPT.

1. Current Situation: Bitcoin Reserves and Trump's Energy Policy

Against the backdrop of intensifying 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 Trump administration's policy direction shows two main tendencies:

(1) Support traditional energy industries, advocating for a reduction in 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 goals of the Trump administration.

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

2. Feasibility Analysis

2.1 The Technical Feasibility of Using State-Owned Energy for Bitcoin Mining

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 closed or plan to close coal-fired power plants to comply with environmental regulations. However, some power plants still have generating capacity and can resume operations in the short term, converting these plants for Bitcoin mining. This not only improves the utilization of abandoned infrastructure but also generates 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, enhancing 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 in a low usage state most of the time and can be used for mining during non-emergency periods without affecting national defense security needs.

· Offshore oil drilling platform residual energy: The United States generates a large amount of associated gas (flared gas) during oil extraction. Due to high recovery costs, a significant amount of gas is directly burned and emitted, resulting in energy waste. If small mobile mining facilities are deployed on these drilling platforms to utilize associated gas to drive mining machines, it can not only reduce carbon emissions but also convert waste gas into economic benefits.

· 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 periods of low electricity demand (such as at night or during seasonal load variations). This excess electricity can be partially used for Bitcoin mining, enhancing the efficiency of nuclear energy utilization without compromising grid stability.

2.2 Estimation of Mining Contribution to Bitcoin Reserves

Based on technical feasibility, assuming that the United States can utilize 5–20 GW of energy for Bitcoin mining, with current mainstream mining machines (such as Antminer S21, with a power consumption of about 3 kW and a hash rate of 200 TH/s), the theoretical hash rate could reach:

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

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

At the current difficulty level of the Bitcoin network, such computing power would correspond to an annual production of about 450–1800 Bitcoins (dynamically adjusted according to mining difficulty). Even with a lower estimate, the U.S. government could significantly increase its national reserves of Bitcoin through this method and enhance 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, improve the economic efficiency of the traditional energy industry, and promote the compliance process of cryptocurrency assets, laying the foundation for the long-term development of Bitcoin in the U.S. financial system.

3. 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 retired power plants need to be restarted or grid capacity needs to be expanded, and related costs may rise further.

· Mining machine deployment and maintenance: Assuming the deployment of a million mining machines, the costs of purchasing, transporting, installing, and initial maintenance alone may exceed 5 billion dollars, not including subsequent electricity costs and long-term operation and maintenance costs.

Even with the use of retired facilities to reduce some of the initial investment, the overall funding requirement remains immense, and there is a lack of clear financial sources. If the government attempts to support the plan through budgetary allocations or public funds, it may face opposition from Congress and the public, further complicating the implementation of the policy.

3.2 Environmental Pressure

The high energy consumption characteristics of Bitcoin mining have always been a focal point 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 suggest that if Bitcoin mining relies on coal or natural gas power generation, the annual carbon emissions could reach several million tons of CO₂, equivalent to the annual emissions of millions of fuel-powered vehicles, which will undoubtedly provoke environmental opposition both domestically and internationally. On the international level, the U.S. 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 proportion 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 have strong objections to the plan, primarily for the following reasons:

· Should the government directly intervene in Bitcoin mining? This issue involves the fundamental framework of fiscal and monetary policy, which may lead to prolonged legislative and political disputes, and even affect the independence of the Federal Reserve's monetary policy.

· Regulatory issues of the Department of Treasury, SEC (Securities and Exchange Commission) and CFTC (Commodity Futures Trading Commission): The legal positioning of Bitcoin remains controversial, and the government may need to adjust the current regulatory framework for holding Bitcoin, and may even face judicial challenges.

· How to ensure the security of government Bitcoin reserves? As a decentralized asset, the storage and management of Bitcoin face technical risks such as hacking attacks and private key security. Once a security incident occurs, it may affect government credibility.

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

3.4 Social Acceptance Issues

Despite the growing acceptance of Bitcoin globally, there remains significant controversy in American society. The general public has limited trust in Bitcoin, partly due to its extreme price volatility and its past associations with illegal financial activities. Furthermore, 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 affect 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 this area, 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 The International Controversy Caused by Centralized Computing Power

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

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

· Policy countermeasures from Europe and other countries: Stricter cryptocurrency regulations may be introduced, and even restrictions on Bitcoin trading could be imposed to prevent the US from using its computational 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 the exploration of alternatives such as decentralization or their own central bank digital currencies (CBDCs).

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

Conclusion

If the Trump administration hopes to increase the national Bitcoin reserves without adding to the fiscal burden, utilizing state-owned energy mining is a technically feasible but politically and socially resistant option. From the perspective of energy utilization, the potential available electricity of 5–20 GW could support an annual production of 450–1800 Bitcoins, providing a low-cost opportunity for national asset diversification.

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

1. Use green energy (such as hydropower and nuclear power) to reduce carbon emission disputes.

2. Reduce the pressure of direct government investment by collaborating with listed mining companies.

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

4. Develop public communication strategies to enhance social recognition.

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