At one million dollars per BTC, the mining system would attempt to absorb roughly seven per cent of global electricity production.

That is not a seven per cent increase in the electricity price. It is a seven per cent increase in demand for an essential input whose short-run supply is notoriously inflexible. Power stations, transmission lines, substations, transformers and grid connections cannot be summoned into existence because a speculative asset has had a particularly exciting year.

The world currently adds electricity demand at roughly three to four per cent annually. BTC mining alone would therefore attempt to impose nearly two years of normal worldwide demand growth on top of AI data centres, air conditioning, electric vehicles, industrial electrification and ordinary economic expansion.

The first result would be higher wholesale electricity prices. In constrained markets, the increase could be far larger than seven per cent because electricity prices are set at the margin. Once cheap generating capacity is exhausted, the grid must call upon increasingly expensive power. A modest increase in demand can therefore produce a thoroughly immodest increase in price.

Then the shock moves through the economy. Electricity is embedded in aluminium, steel, cement, chemicals, fertiliser, semiconductors, food processing, refrigeration, water treatment, transport, warehouses, hospitals and data centres. It is not merely one item in the household budget. It is an input into almost every other item.

Imports offer no escape. An imported refrigerator contains the electricity used to refine its metals, mould its plastics, manufacture its components, assemble it, refrigerate the factory, operate the port and maintain the digital systems that coordinated its journey. When the energy shock is global, foreign producers face the same rising costs. Inflation simply arrives inside the shipping container. The ECB has noted that global energy shocks compound through international supply chains because each producer inherits the higher costs of the suppliers before it.

Consumer inflation would begin with electricity bills and then spread into food, manufactured goods, construction, transport and services. The initial increase would appear in headline inflation. The second round would appear in core inflation as businesses raised prices, workers demanded compensation and landlords, contractors and service providers passed on their own higher costs.

Large and persistent energy shocks are particularly dangerous because the pass-through is nonlinear. Small, temporary increases may remain largely within the energy component. Large shocks spread disproportionately into the rest of the price system.

No responsible economist could derive one universal inflation number from the seven per cent demand figure alone. The result would depend upon grid capacity, fuel mix, regulation, exchange rates and the speed of new construction. But an illustrative outcome is clear. Even a ten to twenty-five per cent rise in electricity prices would add directly to consumer inflation and then create a larger cumulative effect through production and imports. In energy-constrained or import-dependent countries, the total inflationary impulse could plausibly run into several percentage points over multiple years.

The effect on economic growth would run in the opposite direction.

Businesses unable to pass on their costs would reduce production, investment and employment. Energy-intensive factories would close, relocate or operate below capacity. The OECD estimates that a five per cent energy-price increase reduces firm productivity by approximately 0.4 per cent after one year. A sustained global electricity shock would therefore be not merely inflationary but contractionary.

The result has a familiar and unpleasant name: stagflation.