Chapter 04. Bitcoin mining: when energy becomes commitment

Here is the June 2026 draft of chapter 04 in my forthcoming new book, When Policy Falls Behind: Bitcoin, AI, and the Governance of Fast Systems. Comments are welcome! Click here for a downloadable pdf version.

Introduction

Envision a Bitcoin mining operation – a specialized, energy-intensive data center – powered entirely by renewable energy, located behind the meter at a wind farm in a jurisdiction with persistent excess generation. It absorbs surplus electricity during periods of low market demand, improves the wind farm’s economics, employs local workers, pays taxes, and complies with formal rules governing industrial electricity use. Such an operation can still generate governance friction.

Regulators do not evaluate activity through rules alone (Scott, 1994; Scott, 2005; Goodell, 2019). They rely on institutionalized schemas (March and Olsen, 1984; Scott, 2005), formed through decades of oversight of manufacturing, agriculture, and resource extraction, that define what “appropriate” industrial energy demand looks like. Bitcoin mining might satisfy the regulatory requirements but can still conflict with normative and cultural-cognitive expectations because it does not map onto traditional industrial categories. Where regulators reinterpret these schemas, mining can be integrated; where they do not, it is treated as anomalous or suspect.

The mismatch stems from mining’s departure from established industrial archetypes. Conventional energy-intensive industries convert electricity into tangible goods – steel, chemicals, agricultural outputs – that can be classified, measured, and situated within existing regulatory frameworks. Bitcoin mining produces no conventionally classifiable commodity. The energy it consumes is not an input into a separable good but part of the computational work that secures a globally distributed ledger (Nakamoto, 2008). Mining is the mechanism through which a trustless settlement system converts physical expenditure into credible commitment (Berg et al., 2020). Seen this way, governance friction is a predictable response to an activity that satisfies industrial energy rules while unsettling the institutional schemas through which legitimate demand is recognized: mining remains hard to place within the categories energy governance already uses because its role is to provide “thermodynamic commitment.”

The friction therefore originates most durably at the political and epistemic levels. Governance communities have settled foundational commitments about what energy systems are for, how energy consumption relates to social benefit (Sovacool et al., 2017), and which criteria should guide assessments of industrial demand. Mining can comply at the operational and implementation levels while still falling outside the framework within which those commitments were formed. It unsettles the criteria before it violates any single criterion.

In Chapter 2’s terms, the energy-mining interface is a site of institutional latency: technical and informational change can be recognized before a legitimate, binding institutional response can be produced. The delay is not a simple failure of awareness. Governance actors may see mining’s operational effects and still lack a governance form capable of settling how an activity built around thermodynamic commitment should be classified within energy systems whose categories were formed around conventional industrial output. Mining’s institutional dimensions have been identified as a research priority by industry and academic stakeholders (Rudd et al., 2023) but a systematic institutional economics framing remains underdeveloped.

Williamson’s governance-form analysis (Williamson, 1985, 1998, 1999) grounds that framing in transaction costs. Mining’s fundamental transformation creates bilateral dependency and pushes miners toward vertical integration, jurisdictional diversification, and mining-to-HPC conversion. Those trajectories are adaptive responses to a value filter conflict rather than separate technical solutions, and each leaves observable institutional signatures that can be analyzed without losing sight of the epistemic source of the friction.

Proof of Work as institutional commitment

Thermodynamic commitment

Bitcoin governance cannot be analyzed only as protocol administration because PoW gives the protocol a particular institutional form. Nakamoto (2008) describes the mechanism in technical terms: hash functions, difficulty targets, block propagation, and cumulative work. The institutional question is what that work accomplishes once it is treated as a governance arrangement. Energy expenditure does not sit outside Bitcoin’s governance problem as an environmental side effect. It is, instead, the energy-based means through which the system turns irrefutable physical cost into a public settlement condition.

PoW embeds physical energy cost into digital scarcity by making block production expensive before the block can be accepted. A miner who produces a valid block has already committed energy, hardware depreciation, cooling capacity, and operational attention to a result that the network may still reject. Williamson’s credible commitment logic is useful here because the expenditure is observable in its result, costly to produce, and unrecoverable after the fact (Williamson, 1983). The institutional function exceeds engineering security. PoW makes commitment legible to strangers who need not trust the miner, a court, an administrator, or a reputation-bearing intermediary.

The security guarantee against transaction reversal follows from that institutional form. Producing an alternative chain history that the network would accept requires an attacker to recreate and overtake the cumulative work of honest miners, so the cost of rewriting history scales with the energy and hardware already committed to the accepted chain (Nakamoto, 2008; Rosenfeld, 2014; Gervais et al., 2016). Conventional credible commitments often depend on surrounding institutions that can punish defection or enforce performance after a dispute. PoW moves part of that commitment into the physical history of computation. The energy has been spent, and no institutional actor can reverse the expenditure or alter the fact that the cost was incurred.

Thermodynamic commitment is distinctive because it makes settlement assurance verifiable without a trusted intermediary. The ledger’s integrity is anchored in physical irreversibility rather than in institutional promises. That does not make institutions irrelevant but changes where institutional reliance enters the system. Bitcoin reduces dependence on ex post enforcement for the validity of a block while increasing dependence on the energy, hardware, jurisdictional, and norm-layer arrangements that keep PoW participation viable. The energy governance problem begins at that boundary: the same mechanism that makes Bitcoin settlement institutionally powerful also makes mining difficult for energy governance regimes to classify.

Asset specificity

Mining infrastructure turns that commitment mechanism into a Williamsonian asset-specific investment. Application-specific integrated circuits (ASICs) designed for Bitcoin’s SHA-256 PoW algorithm have almost no productive use outside that protocol (Taylor, 2017). Their economic value depends on continued profitable participation in Bitcoin’s consensus process, and that profitability is governed by conditions the miner cannot control: difficulty adjustment, block subsidy decline, fee-market development, Bitcoin price, electricity price, and local regulatory treatment. The point of the asset-specificity claim is not that mining hardware is merely specialized. It is that miners become institutionally exposed once capital is committed to a use whose value depends on several governance environments at once.

The “fundamental transformation” occurs when that exposure becomes difficult to reverse. Before deployment, miners can compare hardware suppliers, energy providers, hosting jurisdictions, and financing arrangements. After deployment, the miner has sunk capital into equipment, power infrastructure, site relationships, and operational routines whose value depends on continued access to Bitcoin mining. In Williamson’s (1985) terms, ex ante competition gives way to ex post dependency once relationship-specific investment is made. Bitcoin’s security depends on miners making that commitment, while miners depend on a network and an institutional environment they cannot govern by contract.

The dependency is not confined to the miner-network relationship. Once a mining facility has been constructed, the PPA signed, the cooling infrastructure installed, and local regulatory relationships established, the miner is also tied to the host jurisdiction. The energy provider may be the only supplier at the required scale. The regulatory regime controls permitting, taxation, environmental compliance, and public legitimacy. These relationships are not peripheral to mining’s institutional form but they determine whether the thermodynamic commitment can continue to be produced under conditions that make economic and political sense.

Jurisdictional bilateral dependency follows from the same asset-specific structure. Informal norms within the host governance system shape whether the facility is treated as legitimate industrial operation or as an unwelcome intrusion (Schmidt and Scott, 2021). A miner can comply with tariffs and interconnection rules while remaining exposed to changes in the evaluative categories that determine whether the activity is welcomed, restricted, taxed, or prohibited. Asset specificity thus creates simultaneous governance exposure at the protocol, energy provision, and regulatory interfaces.

Transaction costs and governance form

The transaction cost profile of mining governance follows from this combination of specificity and uncertainty. Asset specificity is high because capital is locked into a narrow protocol use. Uncertainty is high because profitability depends on protocol-level variables, energy market conditions, regulatory interpretation, and norm-layer legitimacy. Frequency is moderate in a governance sense: blocks are produced roughly every ten minutes, while the institutional decisions that shape mining’s operating environment arise intermittently and rarely repeat in identical form. Those attributes make spot market adjustment inadequate as a governance response (Williamson, 1979).

Williamson’s discriminating alignment hypothesis predicts that transactions with high asset specificity, high uncertainty, and limited repeatability tend to require relational or hierarchical governance forms that can support bilateral adjustment, dispute resolution, and adaptive coordination (Williamson, 1991). Bitcoin mining is institutionally unusual because the transaction has those attributes while the protocol deliberately withholds the ordinary governance forms that would normally manage them. Mining instead becomes a commitment system whose participants absorb relational hazards through surrounding institutions, informal norms, and exit.

Bitcoin governance

Bitcoin’s architecture leaves miners without a formal relational governance mechanism even though mining has the transaction attributes that would normally call for one. Difficulty adjustment policy, fee-market disruption, relay policy, and protocol changes can alter mining economics, yet miners do not have a recognized forum in which their interests are represented as a class. That absence is not a design oversight in the ordinary sense. It is part of Bitcoin’s institutional identity: protocol validity is not meant to be renegotiated through a managerial relationship with miners.

Informal norms therefore carry work that a conventional governance form would handle more explicitly. Mining pool conventions, hashrate signaling, difficulty adjustment expectations, and anti-censorship norms help stabilize expectations without creating a formal channel of miner authority. These norms can be adequate under ordinary conditions because they preserve Bitcoin’s suspicion of discretionary control. Their weakness appears under stress, when dispute resolution, adaptive renegotiation, and credible enforcement would be useful yet institutionally unavailable. The PoW commitment device therefore creates a double exposure: it secures settlement by replacing trusted enforcement with physical cost, and it pushes the production of that cost into energy governance regimes whose value filter may not recognize the mining as legitimate.

Energy governance regimes and their institutional assumptions

Energy governance, mapped through the four-level IAD architecture (Chapter 2), reveals an institutional structure whose assumptions Bitcoin mining violates at almost every level. The violations differ in character and durability, and the friction intensifies at higher governance levels, concentrating most durably at the epistemic level where the value filter is set. A technical framing expects friction to concentrate at the operational level, where engineering solutions are available. Institutional analysis suggests the opposite: operational level friction is the most tractable and the least consequential for the governance dynamics that matter.

The existing academic literature on Bitcoin’s energy consumption has focused primarily on measurement and environmental accounting: estimating annualized electricity consumption, attributing carbon emissions, and comparing mining’s energy footprint to national or industrial benchmarks (e.g., de Vries, 2018; Stoll et al., 2019; Jones et al., 2022). This work has usefully documented the scale of mining’s energy demand. It has not sought to explain why governance friction persists regardless of the answers those estimates provide.

A jurisdiction that understands that mining consumes less energy than previously estimated, or that its energy is entirely renewable, does not necessarily resolve its governance friction with the activity. The measurement literature treats the energy question as empirical: how much, from what source, with what environmental consequence (Neumueller et al., 2025). My institutional take treats it as structural: why does any quantity of energy consumed under this institutional logic generate friction that the answers to the empirical questions cannot resolve?

Operational level

At the operational level, grid management translates demand into categories that can be priced, dispatched, and curtailed. Formal rules organize that translation through tariffs, interconnection standards, dispatch protocols, and electricity futures markets. Those rules assume industrial demand with load patterns, price response, and measurable output stable enough to support planning (Lotfi et al., 2018; AEMO, 2020; Ribó-Pérez et al., 2021; Siddiquee et al., 2021).

Bitcoin mining’s operational demand profile is unusual in this context but not inherently problematic (Carter et al., 2023). Mining load is interruptible on extremely short notice, geographically flexible, price-sensitive, and indifferent to time-of-day patterns that shape most industrial demand (Shan and Sun, 2019; Menati et al., 2023; Hajiaghapour-Moghimi et al., 2024). Within the Texas ERCOT grid, Bitcoin miners can even act as contractable controllable load resources, ceding operational control of their facilities to ERCOT when fine-scale demand response is required during times of high grid stress (Carter et al., 2023; Skiles et al., 2023). These characteristics make mining a potentially valuable flexible demand resource, particularly in deregulated markets where demand response participation is compensated.

At this level, the institutional interaction between mining and energy governance is manageable and, in some configurations, highly beneficial. The friction that exists relates primarily to classification: mining falls outside the demand categories that grid governance was designed to manage, creating administrative ambiguity even where the operational interaction is benign.

Implementation level

At the implementation level, energy regulation is shaped by regulators and utility commissions operating under higher-level mandates and their own set of rules, as well as informal norms about what constitutes legitimate industrial energy use. These norms embed institutionalized schemas about inputs, outputs, and socially recognized forms of value creation. Their application by regulatory and enforcement actors to Bitcoin mining produces a specific pattern: formal compliance coexists with persistent norm-layer friction, much of which can remain hidden until governance stress and conflict surface it.

Implementation level friction is carried through expectations rather than through formal rule violation. Mining typically satisfies electricity tariffs and interconnection standards while failing the informal tests attached to those rules: employment per megawatt, physical commodity output, community economic development, and environmental impact per unit of production. A utility regulator evaluating an interconnection application may apply those expectations as powerfully as any formal criterion, even though they appear nowhere in the application requirements. Mining fails in that setting because the norm layer was constructed around industrial activities that did not include digital scarcity production.

Political level

At the political level, foundational commitments about energy access, environmental stewardship, and the role of the state in energy markets (Sovacool and Dworkin, 2015) define the boundaries within which implementation level rule creation and enforcement strategy operates. Bitcoin mining challenges these commitments in jurisdiction-specific ways. In jurisdictions committed to decarbonization, mining raises the question of whether any new large-scale industrial demand is acceptable. That question applies regardless of energy source because the epistemic commitment is framed in terms of demand reduction, not source substitution (Sovacool and Dworkin, 2015; Truby, 2018; Brown, 2025).

In jurisdictions committed to energy sovereignty, Bitcoin miners may draw scrutiny when they use cheap local energy to produce hashrate for a global network while providing limited local benefits. The resulting question is whether domestically generated electricity should be permitted to “leave” the region as exported hashrate. In jurisdictions experiencing energy scarcity, mining may compete directly with other users in ways that activate commitments about equitable access (Benetton et al., 2023). Each framing generates friction that implementation level accommodation cannot resolve because the friction originates in commitments that subsume the implementation level that regulators administer.

Epistemic level

The epistemic level is where energy governance communities have settled the foundational question of what energy systems are for. These commitments – about the relationship between energy consumption and social benefit, and about what constitutes a legitimate claim on energy resources (Fell, 2017; Sovacool et al., 2017; Pesch et al., 2023) – function as the value filter through which all lower-level governance is conducted.

The value filter in most jurisdictions and industrial sectors assumes a common institutional logic: energy is consumed as an input to a production process that generates recognizable social output. When a policymaker or elected official assesses whether an industrial energy demand is legitimate, the assessment runs through this filter: does the consumption generate outputs the governance system recognizes as socially valuable? The question operates through the informal expectations that shape implementation and political level governance but it rests on epistemic foundations.

Bitcoin mining’s institutional logic falls outside this framework. The energy expenditure is the mechanism itself: a thermodynamic commitment that makes trustless settlement possible, rather than an input into a production process the value filter already recognizes. The output is ledger integrity, which has no settled place in the legacy evaluative framework governing energy policy. Better explanation cannot close that gap by itself. A governance actor who fully understands PoW may still experience the friction because understanding the mechanism does not change the epistemic framework within which the actor judges legitimate energy use.

Cross-level dynamics

Epistemic level commitments cascade downward through the IAD architecture. They constrain what political level actors can legitimize and what implementation level governance can accommodate. A jurisdiction whose epistemic commitment frames energy as a public resource for recognized social utility cannot accommodate mining through implementation level rule changes alone. The accommodation would require revision of the evaluative framework itself, an epistemic level change that is the most path-dependent and the most resistant to deliberate redesign.

The testable implication is that governance friction should vary with the value filter a jurisdiction applies to energy allocation. Jurisdictions where energy is treated primarily as a commodity allocated through price signals (Rosenow et al., 2019) should produce less friction than in jurisdictions where energy is treated as a public resource reserved for recognized social purposes (Sovacool and Dworkin, 2015; Sovacool et al., 2017). The relevant variable is the degree of mismatch between mining’s institutional logic and the jurisdiction’s epistemic commitments rather than energy consumption, energy source, or operational performance. Texas (Zarnikau, 2011) and New York (Brown, 2025) provide a useful pairing for testing that claim.

The pragmatist distinction between computational knowledge and volitional choice (Chapter 2) specifies the mechanism through which epistemic level friction resists resolution. Operational level energy governance is computational in that it is rule-following, deterministic, and amenable to technical adjustment. The question of whether mining constitutes legitimate industrial energy demand is, in Bromley’s (2006) perspective, volitional: it requires deliberation about what energy systems should accomplish for society and what counts as a legitimate claim on shared resources. Operational data about grid impacts or demand response value cannot resolve a dispute over the institutional purpose of the activity.

A counterpoint – transitional governance?

One strong counterargument is that mining’s governance friction may be transitional rather than structural. AI data centers were – and in some jurisdictions still are – viewed with suspicion by society and some energy governance actors (Al kez et al., 2020; Libertson et al., 2021; Bridges, 2024; Edwards et al., 2025): large, opaque facilities consuming large amounts of electricity for purposes that were, until recently, unfamiliar to regulators. Despite growing community-level concern, governance regimes have increasingly accommodated them (Davenport et al., 2024). The analogy raises the possibility that Bitcoin mining may follow the same trajectory once regulators become more familiar with it.

AI data centers, however, differ because their institutional logic is already increasingly legible to energy governance actors. They produce computational services for identifiable customers and consume energy as an input into a product – computational knowledge – whose social utility can be evaluated through productivity, scientific and medical research, and national security claims (Aschenbrenner, 2024; Lu et al., 2024; Pruet et al., 2026), even as the bounds of those claims remain contested (Acemoglu, 2025). Their governance friction was, at least partly, classificatory: governance actors needed time to develop appropriate categories for an activity whose basic input-output form was not entirely alien to the evaluative framework.

Mining does not present the same kind of classification delay. Its energy expenditure is the commitment mechanism itself, and familiarity cannot turn that expenditure into an input-output process recognized by the inherited value filter. The data center analogy thus supports the diagnosis by showing what accommodation looks like when an activity’s institutional logic is legible, and why mining faces a different obstacle.

Energy governance collisions

Texas: operational accommodation, latent epistemic friction

Large-scale mining operations in Texas participate in ERCOT’s demand response programs, curtailing consumption during peak demand periods in exchange for economic compensation (Rhodes et al., 2021; Carter et al., 2023; Skiles et al., 2023; ERCOT, 2024). At the operational level, this arrangement works: mining provides genuinely flexible load that improves grid stability during stress events (Woodfin, 2023). The demand response mechanism is precisely the institutional accommodation that a technical framing would identify as the solution to governance friction.

The friction persists despite that contractual structure. Miners participating in demand response are not recipients of transfers from a grid revenue pool; they hold PPAs granting contractual rights to specified volumes, and during grid stress events they exercise those rights by curtailing mining and selling contracted power back into the spot market. The transaction is arbitrage within an existing contractual position rather than compensation drawn from ratepayer-funded infrastructure.

The Texas arrangement works operationally because each party can identify a contractual benefit. The grid receives curtailment during stress, consumers face fewer and less severe peak-load price spikes, and miners arbitrage the difference between contracted and spot prices. On operational and contractual grounds, there is no obvious institutional harm. That distribution of benefits, however, does not settle the value filter problem. The federal (OSTP, 2022) and Texas state governments, media, and other critics have contested mining’s legitimacy, at least in part because the activity does not fit the inherited expectation that flexible industrial load should come from production the governance system already recognizes. The objection is directed less at operational performance, formal compliance, or immediate distributive effect than at the category of the activity itself.

The Texas case is diagnostic because it shows operational integration working without fully eliminating epistemic conflict. Where formal rules are satisfied and the activity still remains suspect, the residual friction belongs to the political and epistemic levels rather than to grid operations.

New York: political friction with epistemic origins

New York’s legislative proposals to restrict PoW mining were not primarily responses to formal rule violations. They were responses to political level commitments about environmental stewardship and the kind of industrial activity appropriate in a jurisdiction committed to aggressive climate goals (Montante, 2023; Brown, 2025).

The original 2021 legislative proposal targeted PoW mining operations as an activity category, independent of energy source. Through successive revisions, the enacted 2022 moratorium was narrowed to apply only to PoW operations using behind-the-meter electricity generated from fossilfuels. Subsequent proposals have sought to extend the moratorium’s reach to grid-connected operations regardless of energy source, and the Generic Environmental Impact Statement (Ramboll Americas Engineering Solutions and Energy Infrastructure Partners, 2025) process initiated by the moratorium treats PoW Bitcoin mining as an activity category warranting distinct environmental review irrespective of energy source. The analytically significant feature is the sustained pressure toward activity-based industrial framing, with narrower energy source framings emerging as political compromises rather than as the primary analytical lens stakeholders bring to the contestation.

New York’s proposals targeted PoW mining as an institutional category, applying environmental restrictions through that classification rather than regulating industrial electricity demand in a source-neutral way. The regime was responding to what mining is, not to what it does to the grid or the atmosphere. The political level commitments about appropriate industrial activity were downstream expressions of an epistemic level commitment, that energy consumption in New York should serve recognized social purposes consistent with the state’s climate identity (Brown, 2025). Mining, regardless of its energy source, does not satisfy this commitment.

Quebec: the value filter articulated politically

Quebec is distinctive (Miles, 2018; Atkins et al., 2021) because political actors articulated the epistemic level value filter directly rather than leaving it tacit. In 2018, Premier Philippe Couillard stated publicly that Bitcoin mining “does not contribute” anything of value, and that Quebec was “not really interested” in operations that would simply connect servers and mine Bitcoin without adding recognized value to society. He stated, in effect, that mining fell outside Quebec’s epistemic framework for legitimate energy use regardless of formal compliance with electricity tariffs.

The subsequent trajectory (Atkins et al., 2021) illustrates why partial accommodation remains unstable under persistent epistemic level friction. Quebec first invited mining operations to use hydroelectric surplus, imposed a moratorium when demand exceeded expectations, partially reopened with conditions requiring demonstrated “spinoffs” for the province, and then reimposed restrictions as Hydro-Québec argued that growing provincial demand made mining an inappropriate claim on electricity supply. Each cycle attempted implementation level accommodation without resolving the underlying incompatibility. The accommodation conditions effectively asked mining to demonstrate the kinds of social benefit that the value filter expects from industrial energy users, criteria the activity cannot satisfy by institutional design.

Quebec also illustrates cross-jurisdictional norm contagion. British Columbia, Manitoba, and New Brunswick imposed similar mining restrictions, with British Columbia’s becoming permanent policy. Across provinces, the rationale was consistent: Bitcoin mining consumes large amounts of energy while providing limited employment, community benefit, or recognized economic output. The pattern is consistent with North’s analysis of informal norm diffusion (North, 1990, 2005): once a response crystallizes in one jurisdiction, it lowers the institutional cost of adopting a similar response in jurisdictions that share the same epistemic commitments.

Kazakhstan: geographic mobility and demand-side stress

When Bitcoin mining operations relocated to Kazakhstan following China’s 2021 prohibition (Estecahandy, 2024), they encountered an energy governance regime whose grid infrastructure lacked the capacity to absorb the demand shock, contributing to electricity shortages and outages. The resulting governance responses – emergency pricing changes, capacity restrictions, targeted taxation – reflected not the illegality of mining but the collision between Bitcoin’s geographic mobility and the institutional assumptions of a governance regime that had not anticipated rapid growth in electricity demand from a globally mobile industry.

The episode reveals that the horizontal linkage between Bitcoin’s governance and energy governance is not a stable interface but a governance boundary whose friction depends on conditions – grid capacity, regulatory preparedness, the speed of demand reallocation – that can shift faster than the mechanisms available to manage them. Mining’s geographic mobility is distinctive (Sun et al., 2022; Estecahandy, 2024; Papana and Katrakilidis, 2026): unlike conventional industrial demand anchored by physical supply chains and fully sunk infrastructure, mining can relocate their compute infrastructure in response to governance friction, propagating any institutional incompatibility across governance boundaries. China’s prohibition displaced mining to Kazakhstan, whose grid constraints and unrest displaced mining to Texas, Russia, and other jurisdictions. Each displacement carried potential for the institutional incompatibility to a new governance environment.

United States: a failed Federal initiative

The failed U.S. federal DAME (Digital Asset Mining Energy) excise tax proposal in 2023 – which would have imposed a 30% surcharge on electricity used for mining – shows that epistemic level friction can also generate national policy responses. The proposal argued that mining imposes environmental externalities and does not generate the local and national economic benefits typically associated with businesses using similar amounts of electricity. That language directly echoes the value filter diagnosis. Political level opposition defeated the proposal but its framing confirms that the incompatibility operates across governance scales.

The DAME episode also illustrates Ostromian polycentricity (Ostrom, 1999; Ostrom and Ostrom, 2004; Ostrom, 2010) in action. The proposal activated overlapping authority across federal, state, industry, and media arenas: executive branch initiative, congressional opposition, state-level defense of energy-policy prerogatives, industry coalition-building, and public contestation over the normative terrain. Distributed resistance across a governance landscape with no controlling center defeated the proposal. The process was messy, slow, and institutionally costly, reflecting the balance of competing interests across scales rather than the preference of any single authority.

Stranded energy: the limiting case

Stranded energy mining occupies a different institutional position because the energy has no competing user. The relevant cases include wellhead gas (Snytnikov and Potemkin, 2022; Vazquez and Crumbley, 2022), curtailed renewable generation that cannot reach the grid (Fridgen et al., 2021; Niaz et al., 2022a; Lal et al., 2023; Hakimi et al., 2024), and waste methane that would otherwise be vented (Rudd et al., 2024). In each case, mining serves as a buyer of last resort rather than as a rival claimant on energy that another user could have consumed. The usual magnitude objection weakens when mining converts otherwise wasted energy into settlement security. Methane mitigation can reduce net greenhouse gas emissions by converting methane to carbon dioxide (Leahey et al., 2001; Kabeyi and Olanrewaju, 2022; Kurniawan et al., 2022), which has a lower warming potential (Cicerone and Oremland, 1988; Nisbet et al., 2020).

If objections were primarily a function of environmental impact, they would weaken when mining reduces net emissions. If objections were primarily about grid competition and retail electricity prices, they would weaken when the energy was stranded. The persistence of friction when these objections are absent, to the extent it is empirically observable, suggests the residual source as the institutional incompatibility at the epistemic level. This does not prove that all governance friction with mining is necessarily epistemic in origin: operational and implementation level friction can be real and consequential. The stranded energy case suggests that an epistemic level component exists independently of lower-level causes, and that it may be the most durable component because it is the component that operational level accommodation cannot reach.

Mining and renewable energy development

Mining’s interaction with renewable energy development (Niaz et al., 2022a; Niaz et al., 2022b; Ibañez and Freier, 2023; Lal et al., 2023; Rudd and Porter, 2024; Lal and You, 2025) creates an analytically useful horizontal linkage because it shows how operational benefits can remain trapped. Mining can make renewable projects more financeable and scalable by absorbing output before grid connection, monetizing generation during interconnection delays, and using electricity that would otherwise be curtailed (Shan and Sun, 2019; Frew et al., 2021; Niaz et al., 2022a).

Whether this positive externality is recognized depends on a jurisdiction’s epistemic commitments. In jurisdictions with excess generation capacity and market-rationalist energy governance, colocation can find institutional accommodation. Where the value filter treats energy as a public resource for recognized social purposes, operational benefits from specific mining configurations do not necessarily revise the activity category. Governance actors can certainly distinguish renewable-powered from fossil-fule-powered operations, grid-stabilizing from grid-straining configurations, and methane-mitigating from emissions-accelerating deployments; the New York moratorium, Texas demand response treatment, and Quebec industrial tariff classifications all show that discriminative capacity exists.

The fundamental transformation in mining governance

PoW gives mining a distinctive transaction cost profile once its commitments are embedded in particular energy relationships. Miners enter competitive markets ex ante, yet specialized hardware, site-specific power arrangements, and jurisdictional exposure can convert ordinary market choice into durable dependency after investment occurs.

Ex ante competition

Ex ante, a mining operation choosing its deployment location faces competitive conditions. Multiple jurisdictions, energy providers, and hardware manufacturers compete for the miner’s investment, and this competition constrains opportunistic behavior on both sides. A jurisdiction that imposes unfavorable terms loses the investment to a competitor. The governance dynamics at this stage are market governance in Williamson’s (1985) sense: competitive discipline substitutes for administrative oversight and the miner retains meaningful exit options.

Ex post bilateral dependency

Ex post, competitive discipline gives way to layered bilateral dependency. Deployment ties the miner to a local energy provider that may be the only supplier at the required scale. It also ties the miner to a regulatory regime that controls permitting, taxation, and environmental compliance while deciding whether the activity counts as legitimate industrial demand. The protocol creates a third dependency because difficulty adjustment and the halving schedule determine revenue through mechanisms the miner has no governance standing to negotiate. The governance problem is not a single lock-in relationship. It is a stack of dependencies that operate through different institutions at the same time.

Williamson’s framework predicts that this combination of bilateral dependency, high asset specificity, and high uncertainty generates specific governance hazards: hold-up, where one party exploits the other’s sunk investment; and maladaptation, where the governance arrangement cannot adjust to changing conditions (Williamson, 1971, 1985). These hazards motivate a search for adaptive responses, and three are currently observable in mining’s organizational evolution.

Adaptation responses

Vertical integration

Miners who secure their own energy supply, through PPAs, equity stakes in generation, or direct ownership of behind-the-meter infrastructure, can reduce their bilateral dependency on external providers by bringing the energy relationship within the firm boundary. This is a Coasean response to high transaction costs at the market interface (Coase, 1937). The pattern is widely observable: major Bitcoin mining firms increasingly co-locate with or control generation assets, using ownership, joint ventures, and behind-the-meter configurations to reduce exposure to market and regulatory hold-up risk. Vertical integration reduces one dimension of bilateral dependency while deepening the miner’s capital commitment to a specific location, which may intensify the remaining dependencies.

Jurisdictional diversification

Jurisdictional diversification offers a second response. Some Bitcoin miners distribute operations across multiple jurisdictions so that exit from any single governance environment remains possible after relationship-specific investments have been made. The strategy leaves bilateral dependency intact at individual sites while reducing systemic risk across the portfolio. The geographic distribution of large mining companies, most of which now maintain operations across several countries, reflects that logic.

Mining-to-HPC conversion

The most analytically significant adaptive response in 2025 and 2026 has been mining-to-HPC conversion for AI hyperscalers. The response is costly because operators must abandon part of the ASIC commitment, rework power and cooling infrastructure for GPU workloads, and form customer relationships in another industry. In Williamsonian terms, it reflects a costly reconfiguration of governance following the breakdown of a prior fundamental transformation (Williamson, 1985; Teece et al., 1997), as firms unwind asset-specific commitments and re-enter more competitive market relationships. GPU-based infrastructure has a broader institutional and technical use profile than ASIC mining, which changes the governance form problem without making HPC frictionless.

The conversion is analytically valuable because it changes the institutional logic of the activity while holding much of the energy setting constant. The facility, grid connection, jurisdiction, and broad electricity demand remain comparable; the activity carried by that infrastructure changes. AI compute demand often, though not always, fits existing norm categories because it produces recognized services for identifiable customers and can be evaluated through familiar claims about productivity, research, or strategic capacity. To the extent that converted facilities experience reduced governance friction relative to their prior mining operations, and the early evidence is consistent with that possibility, the comparison supports the diagnosis that the governance problem lies in mining’s institutional logic rather than in energy consumption as such. The boundary is between institutional logics, not between energy quantities.

Network resilience implications

The mining-to-HPC conversion also has implications for Bitcoin’s network that cut in non-obvious directions. Large-miner exit may increase mining decentralization through compositional change: the remaining ecosystem becomes more geographically distributed and resilient, less dependent on the regulatory accommodation of any single jurisdiction. At the same time, the departure of the most institutionally-sophisticated operators – those with the capacity to engage regulators, participate in grid governance, and represent mining’s interests in policy discussions – reduces the level of human and social capital available at the implementation level (see Rudd et al., 2023). The remaining ecosystem may be more decentralized but less capable of engaging with modern energy governance regimes. Whether network-level resilience gains outweigh the loss of institutional governance capacity remains an empirical question.

Governance trajectories and institutional response

Three governance trajectories for the energy-mining interface are currently identifiable but none resolves institutional latency. Each is consistent with a different configuration of informal norms and institutional responses, and each generates observable indicators that can discriminate between them as evidence accumulates. This trajectory approach parallels the Bitcoin Worlds framework (Chapter 8) but here the cleavages are specific to the energy-mining interface.

Governance responses

Accommodation, in which energy governance regimes recognize mining as a legitimate demand category, requires sufficient flexibility within the value filter to register mining’s operational contributions even if its institutional logic remains foreign. The enabling conditions are recognizable: growing grid-operator recognition of flexible load value; jurisdictional competition generating policy innovation; renewable developers finding co-location economically attractive; and mining operations demonstrating sustained, documented demand response benefits.

The context-dependent question will be whether partial accommodation is stable over time or reverts under stress. Quebec’s moratorium-reopening-restriction cycle (Atkins et al., 2021) suggests the latter; Texas’s continued integration (Rhodes et al., 2021; ERCOT, 2024) suggests that accommodation can persist where the epistemic framework is market-rationalist and grid-related benefits accumulate ahead of the normative backlash.

Prohibition, the exclusion of mining through regulatory action or informal norm enforcement, rests on a different configuration: sustained energy capacity constraints; political alignment of anti-mining sentiment with broader environmental or energy-justice commitments; limited governance innovation capable of differentiating mining activities by their governance-relevant characteristics; and regulatory contagion from enforcement actions in jurisdictions that share epistemic level commitments

Fragmentation, with some jurisdictions accommodating, others prohibiting, and with mining migrating between them, may be the most probable medium-term outcome. Fragmentation does not resolve institutional latency but it distributes it across governance boundaries, with the industry absorbing the transaction costs of potentially ongoing geographic reallocation. The mining-to-HPC conversion can be read as an extreme fragmentation response; miners capable of exiting hostile governance domains entirely do so, leaving the mining ecosystem more dependent on their continued accommodation. Kazakhstan (Estecahandy, 2024) illustrates how fragmentation can itself generate secondary governance collisions. When miners’ mobility outruns the capacity of receiving jurisdictions to recognize rapidly shifting technological landscapes, informational turnover increases; when the capacity to make choices that help absorb the demand shock are impaired, institutional latency increases.

Discriminating between trajectories

The three trajectories generate distinct institutional signatures at the regulatory, market-operator, and propagation levels (Table 4.1). Their diagnostic value lies in whether configurations align across columns within a trajectory or whether cross-cutting patterns suggest transition.

Table 4.1. Discriminating indicators for three governance trajectories

Over time, empirical tracking would permit trajectory identification that is not possible from single jurisdiction observations. Accommodation and prohibition should be most visible through regulatory differentiation or categorical exclusion; fragmentation should appear through convergence-or-divergence patterns and hashrate geography.

The indicators also test the analytical claims. If governance friction correlates more strongly with energy consumption magnitude metrics than with epistemic level mismatch, the value filter diagnosis requires revision. If converted HPC facilities experience friction comparable to their prior mining operations, the claim that friction is specific to institutional logic is weakened. If moratoria spread primarily across jurisdictions with comparable capacity constraints rather than aligned epistemic commitments, the norm contagion hypothesis requires revision.

A further indicator bears on a governance trap mechanism. If jurisdictions developing differentiated monitoring infrastructure subsequently revise categorical assessments of mining, the monitoring failure is interruptible. If they develop differentiated data but retain undifferentiated assessments, the trap operates through epistemic commitments that empirical differentiation cannot reach. Existing data collection infrastructure is limited: ERCOT tracks mining demand response participation (e.g., Woodfin, 2023), and the Cambridge Centre for Alternative Finance publishes geographic hashrate estimates and energy mix analyses (Neumueller et al., 2025). The limitation is institutional rather than primarily technical: no governance actors have a clear mandate that compels them to allocate resources to generate differentiated assessments at the scale the dispute requires.

Changing the conditions

The governance trajectories depend on conditions produced through decades of institutional evolution. If the epistemic level value filter governing energy policy could be revised to accommodate mining’s institutional logic, institutional latency would dissipate and the governance form question would recede. Institutional economics explains why that route is unpromising on policy-relevant timescales.

The value filter governing energy policy is path-dependent in a strong sense (North, 1990, 2005). Its current configuration reflects institutional investments from the electrification era (Hughes, 1983), the industrial-use-of-energy framework that grew alongside it (Hirsh, 1999), the environmental governance regime that layered onto that framework from the 1970s (Lazarus, 2004), and the climate-era recalibration of the past decades (Meadowcroft, 2009). These investments are embedded in regulatory categories, professional training, evaluative vocabularies, utility commission procedures, grid planning protocols, and industry expectations. Greif’s (2006) analysis of self-enforcing beliefs and behaviors applies directly: the value filter is not enforced by one actor but reproduced through coordinated expectations.

The climate-era recalibration and the rapid movement of renewable energy from marginal to central in many jurisdictions show that informal norms can incorporate new evaluative commitments (Geels, 2011; Meckling, 2019). The mechanisms are specific: accumulated operational experience that shifts evaluative frameworks (Mahoney and Thelen, 2010); generational turnover among governance actors (Kuhn, 2012 [1962]); exogenous shocks that reset parameters (North, 1990; Capoccia and Kelemen, 2007); and sustained epistemic work that reshapes categorization (Haas, 1992). These mechanisms, however, operate on timescales typically measured in years to decades.

Institutional latency is most durable at the informal norm layer because norm change is governed by mechanisms that high algorithmic velocity activities cannot invoke at the pace their operations require. Bitcoin’s protocol operates on a 10-minute clock but its governance interface with energy regimes operates on a multi-year – or longer – clock. Operators and policymakers facing energy-mining collisions today cannot wait for a shift in the value filter to accommodate the activity. They must act within the epistemic level value filter as it stands, which means working on governance form rather than trying to shape exogenous conditions shaping governance conditions.

Evolving governance form

Three governance form responses follow from the diagnosis. First, epistemic level deliberation would make the value filter explicit rather than treat mining disputes as ordinary grid management conflicts. Its task would not be to decide whether mining deserves accommodation but to separate the empirical question of grid impact from the volitional question of whether PoW expenditure can count as a legitimate claim on energy infrastructure.

Second, structured deliberative mechanisms could give that distinction an institutional venue. The present governance landscape collapses empirical and normative questions: objections to mining are expressed as grid impact claims, while accommodations are defended as if operational value settled legitimacy. A structured forum could keep operational accommodation available, where the evidence supports it, while leaving the underlying legitimacy question open to contestation.

Third, experimental management and polycentric learning could turn jurisdictional fragmentation into comparable evidence. The energy-mining governance interface already varies across jurisdictions and contextual conditions. Shared monitoring protocols, data sharing, and forums for comparing results and revision mechanisms would let those differences become cross-context learning.

These mechanisms would not revise the value filter on demand. Their function would be to reduce the scope of the friction, separate empirical from normative claims, and organize learning across jurisdictions while slower norm-layer evolution proceeds.

Conclusion

The governance friction surrounding Bitcoin’s energy consumption is not about magnitude. A more efficient network, a greener network, or a network consuming only stranded energy can each generate persistent friction because the conflict originates at the epistemic level, where energy governance has settled foundational commitments about what energy systems are for. Mining’s purpose – the expenditure of energy as a credible thermodynamic commitment mechanism – falls outside that evaluative framework.

Institutional economics relocates the Bitcoin energy debate from magnitude comparisons and environmental accounting to the foundational governance commitments where the friction originates. Texas shows that operational accommodation does not neccesarily resolve epistemic friction. New York and Quebec show political level targeting of mining as an institutional category regardless of energy source. Kazakhstan and the DAME proposal show geographic mobility and institutional latency propagating friction across governance boundaries and scales. Stranded energy mining shows that an epistemic residual can persist even after conventional objections have been settled.

Monitoring and conflict resolution failures are structural consequences of epistemic incompatibility rather than temporary bureaucratic gaps. They operate through a governance trap in which epistemic friction generates monitoring failure and monitoring failure reinforces epistemic friction. Possible governance form responses cannot resolve the incompatibility but may reduce the scope of the friction, separating empirical from normative questions, and organizing learning across jurisdictions.

Once the value filter is articulated, the disagreement is not a misunderstanding to be cleared up through better information or a communications deficit to be addressed through advocacy. It is genuine disagreement about the purposes of energy governance. Bitcoin mining transparently shows institutional latency at the norm layer, a condition to be managed through aligned governance forms rather than a problem to be solved through implementation level regulation alone.

References

Acemoglu, D 2025. The simple macroeconomics of AI. Economic Policy 40: 13-58. https://doi.org/10.1093/epolic/eiae042

AEMO 2020. Wholesale Demand Response: high-level design. Australian Energy Market Operator Limited report, June 2020, https://www.aemo.com.au/-/media/files/initiatives/submissions/2020/wdrm/wdrm-high-level-design-march-2020.pdf

Al kez, D, AM Foley, N McIlwaine, et al. 2020. A critical evaluation of grid stability and codes, energy storage and smart loads in power systems with wind generation. Energy 205: 117671. https://doi.org/10.1016/j.energy.2020.117671

Aschenbrenner, L 2024. Situational Awareness: The Decade Ahead. https://situational-awareness.ai/wp-content/uploads/2024/06/situationalawareness.pdf

Atkins, E, L Follis, BD Neimark, et al. 2021. Uneven development, crypto-regionalism, and the (un-)tethering of nature in Quebec. Geoforum 122: 63-73. https://doi.org/10.1016/j.geoforum.2020.12.019

Benetton, M, G Compiani and A Morse 2023. When cryptomining comes to town: high electricity-use spillovers to the local economy. NBER Working Paper 31312, https://doi.org/10.3386/w31312

Berg, C, S Davidson and J Potts 2020. Proof of Work as a three-sided market. Frontiers in Blockchain 3: 2. https://doi.org/10.3389/fbloc.2020.00002

Bridges, LE 2024. Competing digital capacities: between state-led digital governance and local data center tradeoffs. Information, Communication & Society 27: 1906-1923. https://doi.org/10.1080/1369118X.2024.2331765

Bromley, DW 2006. Sufficient Reason: Volitional Pragmatism and the Meaning of Economic Institutions. Princeton NJ: Princeton University Press.

Brown, G 2025. Reclaiming Public Infrastructure: Public Power New York and the Struggle for Energy Democracy. PhD dissertation, University of Glasgow, https://theses.gla.ac.uk/85234/

Capoccia, G and RD Kelemen 2007. The study of critical junctures: theory, narrative, and counterfactuals in historical institutionalism. World Politics 59: 341–369. https://doi.org/10.1017/S0043887100020852

Carter, N, S Connell, B Jones, et al. 2023. Leveraging Bitcoin miners as flexible load resources for power system stability. SSRN preprint, http://dx.doi.org/10.2139/ssrn.4634256

Cicerone, RJ and RS Oremland 1988. Biogeochemical aspects of atmospheric methane. Global Biogeochemical Cycles 2: 299-327. https://doi.org/10.1029/GB002i004p00299

Coase, RH 1937. The nature of the firm. Economica 4: 386–405. https://doi.org/10.2307/2626876

Davenport, C, B Singer, N Mehta, et al. 2024. AI, data centers and the coming US power demand surge. Equity Research, 28 April 2024, https://www.goldmansachs.com/pdfs/insights/pages/generational-growth-ai-data-centers-and-the-coming-us-power-surge/report.pdf

de Vries, A 2018. Bitcoin's growing energy problem. Joule 2: 801-805. https://doi.org/10.1016/j.joule.2018.04.016

Edwards, D, ZGT Cooper and M Hogan 2025. The making of critical data center studies. Convergence 31: 429-446. https://doi.org/10.1177/13548565231224157

ERCOT 2024. ERCOT ancillary services study. Final whitepaper, https://www.ercot.com/files/docs/2024/10/07/ERCOT-Ancillary-Services-Study-Final-White-Paper.pdf

Estecahandy, H 2024. Geopolitics of cryptocurrency mining in Kazakhstan. Central Asian Survey 43: 327-345. https://doi.org/10.1080/02634937.2024.2324192

Fell, MJ 2017. Energy services: a conceptual review. Energy Research & Social Science 27: 129-140. https://doi.org/10.1016/j.erss.2017.02.010

Frew, B, B Sergi, P Denholm, et al. 2021. The curtailment paradox in the transition to high solar power systems. Joule 5: 1143-1167. https://doi.org/10.1016/j.joule.2021.03.021

Fridgen, G, M-F Körner, S Walters, et al. 2021. Not all doom and gloom: how energy-intensive and temporally flexible data center applications may actually promote renewable energy sources. Business & Information Systems Engineering 63: 243-256. https://doi.org/10.1007/s12599-021-00686-z

Geels, FW 2011. The multi-level perspective on sustainability transitions: responses to seven criticisms. Environmental Innovation and Societal Transitions 1: 24-40. https://doi.org/10.1016/j.eist.2011.02.002

Gervais, A, GO Karame, K Wüst, et al. 2016. On the security and performance of Proof of Work blockchains. Proceedings of the 2016 ACM SIGSAC Conference on Computer and Communications Security, 3–16, https://doi.org/10.1145/2976749.2978341

Goodell, JW 2019. Comparing normative institutionalism with intended rationality in cultural-finance research. International Review of Financial Analysis 62: 124-134. https://doi.org/10.1016/j.irfa.2018.11.018

Greif, A 2006. Institutions and the Path to the Modern Economy: Lessons from Medieval Trade. Cambridge, UK: Cambridge University Press.

Haas, PM 1992. Introduction: epistemic communities and international policy coordination. International Organization 46: 1-35. https://doi.org/10.1017/S0020818300001442

Hajiaghapour-Moghimi, M, OH Tafreshi, E Hajipour, et al. 2024. Investigating the cryptocurrency mining loads’ high penetration impact on electric power grid. IEEE Access 12: 153643-153663. https://doi.org/10.1109/ACCESS.2024.3482098

Hakimi, A, M-M Pazuki, M Salimi, et al. 2024. Renewable energy and cryptocurrency: a dual approach to economic viability and environmental sustainability. Heliyon 10: e39765. https://doi.org/10.1016/j.heliyon.2024.e39765

Hirsh, RF 1999. Power Loss: The Origins of Deregulation and Restructuring in the American Electric Utility System. Cambridge, MA: MIT Press.

Hughes, TP 1983. Networks of Power: Electrification in Western Society, 1880-1930. Baltimore: Johns Hopkins University Press.

Ibañez, JI and A Freier 2023. Bitcoin’s carbon footprint revisited: Proof of Work mining for renewable energy expansion. Challenges 14: 35. https://doi.org/10.3390/challe14030035

Jones, BA, AL Goodkind and RP Berrens 2022. Economic estimation of Bitcoin mining’s climate damages demonstrates closer resemblance to digital crude than digital gold. Scientific Reports 12: 14512. https://doi.org/10.1038/s41598-022-18686-8

Kabeyi, MJB and OA Olanrewaju 2022. Technologies for biogas to electricity conversion. Energy Reports 8: 774-786. https://doi.org/10.1016/j.egyr.2022.11.007

Kuhn, TS 2012 [1962]. The Structure of Scientific Revolutions, 4th edition (50th anniversary edition). Chicago: University of Chicago Press.

Kurniawan, TA, X Liang, D Singh, et al. 2022. Harnessing landfill gas (LFG) for electricity: a strategy to mitigate greenhouse gas (GHG) emissions in Jakarta (Indonesia). Journal of Environmental Management 301: 113882. https://doi.org/10.1016/j.jenvman.2021.113882

Lal, A, J Zhu and F You 2023. From mining to mitigation: how Bitcoin can support renewable energy development and climate action. ACS Sustainable Chemistry & Engineering 11: 16330–16340. https://doi.org/10.1021/acssuschemeng.3c05445

Lal, A and F You 2025. Climate sustainability through AI-crypto synergies and energy transition in the digital landscape to cut 0.7 GtCO2e by 2030. Environmental Science & Technology 59: 6061-6073. https://doi.org/10.1021/acs.est.4c11477

Lazarus, RJ 2004. The Making of Environmental Law. Chicago: University of Chicago Press.

Leahey, DM, K Preston and M Strosher 2001. Theoretical and observational assessments of flare efficiencies. Journal of the Air & Waste Management Association 51: 1610-1616. https://doi.org/10.1080/10473289.2001.10464390

Libertson, F, J Velkova and J Palm 2021. Data-center infrastructure and energy gentrification: perspectives from Sweden. Sustainability: Science, Practice and Policy 17: 152-161. https://doi.org/10.1080/15487733.2021.1901428

Lotfi, M, C Monteiro, M Shafie-khah, et al. 2018. Evolution of demand response: a historical analysis of legislation and research trends. 2018 Twentieth International Middle East Power Systems Conference (MEPCON), https://doi.org/10.1109/MEPCON.2018.8635264

Lu, C, C Lu, RT Lange, et al. 2024. The AI scientist: towards fully automated open-ended scientific discovery. arXiv preprint, https://doi.org/10.48550/arXiv.2408.06292

Mahoney, J and K Thelen 2010. Explaining Institutional Change: Ambiguity, Agency, and Power. Cambridge, UK: Cambridge University Press.

March, JG and JP Olsen 1984. The New Institutionalism: organizational factors in political life. The American Political Science Review 78: 734-749. https://doi.org/10.2307/1961840

Meadowcroft, J 2009. What about the politics? Sustainable development, transition management, and long term energy transitions. Policy Sciences 42: 323-340. https://doi.org/10.1007/s11077-009-9097-z

Meckling, J 2019. Governing renewables: policy feedback in a global energy transition. Environment and Planning C: Politics and Space 37: 317-338. https://journals.sagepub.com/doi/abs/10.1177/2399654418777765

Menati, A, X Zheng, K Lee, et al. 2023. High resolution modeling and analysis of cryptocurrency mining’s impact on power grids: carbon footprint, reliability, and electricity price. Advances in Applied Energy 10: 100136. https://doi.org/10.1016/j.adapen.2023.100136

Miles, K 2018. Bitcoin is eating Quebec. MIT Technology Review, April 11, 2018, https://www.technologyreview.com/2018/04/11/143987/bitcoin-is-eating-quebec/

Montante, A 2023. "Think Globally, Act Locally": New York's evolving approach to address fossil fuel electric use in Proof-of-Work Bitcoin mining operations contributing to climate change. Journal of International Business and Law 22: 7. https://scholarlycommons.law.hofstra.edu/jibl/vol22/iss2/7

Nakamoto, S 2008. Bitcoin: a peer-to-peer electronic cash system. Unpublished white paper, https://bitcoin.org/bitcoin.pdf

Neumueller, A, G Pieters, K Mohaddes, et al. 2025. Cambridge digital mining industry report: global operations, sentiment, and energy use. Cambridge Digital Mining Industry Report, First Edition, https://www.jbs.cam.ac.uk/wp-content/uploads/2025/04/2025-04-cambridge-digital-mining-industry-report.pdf

Niaz, H, JJ Liu and F You 2022a. Can Texas mitigate wind and solar curtailments by leveraging bitcoin mining? Journal of Cleaner Production 364: 132700. https://doi.org/10.1016/j.jclepro.2022.132700

Niaz, H, MH Shams, JJ Liu, et al. 2022b. Mining bitcoins with carbon capture and renewable energy for carbon neutrality across states in the USA. Energy & Environmental Science 15: 3551-3570. https://doi.org/10.1039/D1EE03804D

Nisbet, EG, RE Fisher, D Lowry, et al. 2020. Methane mitigation: methods to reduce emissions, on the path to the Paris Agreement. Reviews of Geophysics 58: e2019RG000675. https://doi.org/10.1029/2019RG000675

North, DC 1990. Institutions, Institutional Change and Economic Performance. Cambridge MA: Cambridge University Press.

North, DC 2005. Understanding the Process of Economic Change. Princeton, NJ: Princeton University Press.

OSTP 2022. Climate and energy implications of crypto-assets in the United States. White House Office of Science and Technology Policy report, https://bidenwhitehouse.archives.gov/wp-content/uploads/2022/09/09-2022-Crypto-Assets-and-Climate-Report.pdf

Ostrom, E and V Ostrom 2004. The quest for meaning in public choice. American Journal of Economics and Sociology 63: 105-147. https://doi.org/10.1111/j.1536-7150.2004.00277.x

Ostrom, E 2010. Beyond markets and states: polycentric governance of complex economic systems. The American Economic Review 100: 641-672. http://www.jstor.org/stable/27871226

Ostrom, V 1999. Polycentricity (Part 1&2). In Polycentricity and Local Public Economies: Readings from the Workshop in Political Theory and Policy Analysis, ed. MD McGinnis. Ann Arbor: University of Michigan Press. https://doi.org/10.3998/mpub.16061

Papana, A and K Katrakilidis 2026. Decentralization under energy growth: geographic reallocation and convergence in Bitcoin mining. Mathematics 14: 1309. https://doi.org/10.3390/math14081309

Pesch, Gt, AK Einarsdóttir, KJ Dillman, et al. 2023. Energy consumption and human well-being: a systematic review. Energies 16: 6494. https://doi.org/10.3390/en16186494

Pruet, J, A Makanju, J Reiber, et al. 2026. AI and international security pathways of impact and key uncertainties. https://cdn.openai.com/pdf/international-security.pdf

Ramboll Americas Engineering Solutions and Energy Infrastructure Partners 2025. Draft generic environmental impact statement for cryptocurrency mining operations using proof-of-work authentication: New York statewide evaluation. Report prepared under contract to the New York State Office of General Services https://dec.ny.gov/sites/default/files/2025-05/cryptocurrencygeis.pdf

Rhodes, JD, T Deetjen and C Smith 2021. Impacts of large, flexible data center operations on the future of ERCOT. IdeaSmiths LLC report, https://www.ideasmiths.net/wp-content/uploads/2022/02/LANCIUM_IS_ERCOT_flexDC_FINAL_2021.pdf

Ribó-Pérez, D, L Larrosa-López, D Pecondón-Tricas, et al. 2021. A critical review of demand response products as resource for ancillary services: international experience and policy recommendations. Energies 14: 846. https://doi.org/10.3390/en14040846

Rosenfeld, M 2014. Analysis of hashrate-based double spending. arXiv preprint, https://arxiv.org/abs/1402.2009

Rosenow, J, R Cowart and S Thomas 2019. Market-based instruments for energy efficiency: a global review. Energy Efficiency 12: 1379-1398. https://doi.org/10.1007/s12053-018-9766-x

Rudd, MA, L Bratcher, S Collins, et al. 2023. Bitcoin and its energy, environmental, and social impacts: an assessment of key research needs in the mining sector. Challenges 14: 47. https://doi.org/10.3390/challe14040047

Rudd, MA, M Jones, D Sechrest, et al. 2024. An integrated landfill gas-to-energy and Bitcoin mining framework. Journal of Cleaner Production 472: 143516. https://doi.org/10.1016/j.jclepro.2024.143516

Rudd, MA and D Porter 2024. Economic integration of Bitcoin mining in renewable energy and grid management. SSRN preprint, https://dx.doi.org/10.2139/ssrn.4899244

Schmidt, R and C Scott 2021. Regulatory discretion: structuring power in the era of regulatory capitalism. Legal Studies 41: 454-473. https://doi.org/10.1017/lst.2021.13

Scott, WR 1994. Institutions and organization: a theoretical synthesis. In Institutional Environments and Organizations: Structural Complexity and Individualism, eds. WR Scott and JW Meyer, 55-79. Thousand Oaks, CA: Sage. https://www.sagepub.com/shop/buy-a-book/institutional-environments-and-organizations-1-4397

Scott, WR 2005. Institutional theory contributing to atheoretical research program. In Great Minds in Management: The Process of Theory Development, eds. KG Smith and MA Hitt, 460–484. Oxford UK: Oxford University Press. https://doi.org/10.1093/oso/9780199276813.003.0022

Shan, R and Y Sun 2019. Bitcoin mining to reduce the renewable curtailment: a case study of CAISO. SSRN preprint (USAEE Working Paper No. 19-415), http://dx.doi.org/10.2139/ssrn.3452015

Siddiquee, SMS, B Howard, K Bruton, et al. 2021. Progress in Demand Response and it’s industrial applications. Frontiers in Energy Research 9. https://doi.org/10.3389/fenrg.2021.673176

Skiles, MJ, JD Rhodes and ME Webber 2023. Perspectives on peak demand: how is ERCOT peak electric load evolving in the context of changing weather and heating electrification? The Electricity Journal 36: 107254. https://doi.org/10.1016/j.tej.2023.107254

Snytnikov, P and D Potemkin 2022. Flare gas monetization and greener hydrogen production via combination with cryptocurrency mining and carbon dioxide capture. iScience 25: 103769. https://doi.org/10.1016/j.isci.2022.103769

Sovacool, BK and MH Dworkin 2015. Energy justice: conceptual insights and practical applications. Applied Energy 142: 435-444. https://doi.org/10.1016/j.apenergy.2015.01.002

Sovacool, BK, M Burke, L Baker, et al. 2017. New frontiers and conceptual frameworks for energy justice. Energy Policy 105: 677-691. https://doi.org/10.1016/j.enpol.2017.03.005

Stoll, C, L Klaaßen and U Gallersdörfer 2019. The carbon footprint of bitcoin. Joule 3: 1647-1661. https://doi.org/10.1016/j.joule.2019.05.012

Sun, W, H Jin, F Jin, et al. 2022. Spatial analysis of global Bitcoin mining. Scientific Reports 12: 10694. https://doi.org/10.1038/s41598-022-14987-0

Taylor, MB 2017. The evolution of Bitcoin hardware. Computer 50: 58-66. https://doi.org/10.1109/MC.2017.3571056

Teece, DJ, G Pisano and A Shuen 1997. Dynamic capabilities and strategic management. Strategic Management Journal 18: 509-533. http://www.jstor.org/stable/3088148

Truby, J 2018. Decarbonizing Bitcoin: law and policy choices for reducing the energy consumption of Blockchain technologies and digital currencies. Energy Research & Social Science 44: 399-410. https://doi.org/10.1016/j.erss.2018.06.009

Vazquez, J and DL Crumbley 2022. Flared gas can reduce some risks in crypto mining as well as oil and gas operations. Risks 10: 127. https://doi.org/10.3390/risks10060127

Williamson, OE 1971. The vertical integration of production: market failure considerations. The American Economic Review 61: 112-123. http://www.jstor.org/stable/1816983

Williamson, OE 1979. Transaction-cost economics: the governance of contractual relations. The Journal of Law and Economics 22: 233-261. https://doi.org/10.1086/466942

Williamson, OE 1983. Credible commitments: using hostages to support exchange. The American Economic Review 73: 519-540. https://www.jstor.org/stable/1816557

Williamson, OE 1985. The Economic Institutions of Capitalism. New York: The Free Press.

Williamson, OE 1991. Comparative economic organization: the analysis of discrete structural alternatives. Administrative Science Quarterly 36: 269-296. https://doi.org/10.2307/2393356

Williamson, OE 1998. The institutions of governance. American Economic Association Papers and Proceedings 88: 75-79. https://www.jstor.org/stable/116896

Williamson, OE 1999. The Mechanisms of Governance. Oxford, UK: Oxford University Press.

Woodfin, D 2023. Item 7: Review of Winter Storm Elliott. ERCOT Board of Directors Meeting presentation, 28 February 2023, https://www.ercot.com/files/docs/2023/02/21/7-Review-of-Winter-Storm-Elliott.pdf

Zarnikau, J 2011. Successful renewable energy development in a competitive electricity market: a Texas case study. Energy Policy 39: 3906-3913. https://doi.org/10.1016/j.enpol.2010.11.043