Bitcoin is the first digital currency that operates without supervision from banks or governments. But in the real world, some miners take shortcuts by stealing electricity. In Malaysia, illegal Bitcoin mining cases have risen sharply. According to Tenaga Nasional Berhad (TNB), electricity theft tripled from 610 cases in 2018 to 2,397 cases in 2024, causing losses amounting to RM441 million. This act is not only wrong from a legal and moral standpoint but is also considered a sin. Prophet Muhammad (peace be upon him) said: “The property of a Muslim is not lawful for another except with his willing consent.” (Hadith narrated by Ahmad). Bitcoin may seem like a purely digital invention, but its foundation is deeply connected to physics, especially in the areas of energy, thermodynamics, and entropy. Behind every virtual coin is a physical process that consumes real energy and follows the same natural laws that govern the universe. Bitcoin mining is the process by which computers compete to solve complex mathematical problems to verify transactions. This process is not just a line of code running in a vacuum; it involves physical machines drawing electricity, generating heat, and performing measurable work. In physics terms, each mining computer acts like a miniature power plant that converts electrical energy into computational work and heat.

According to the first law of thermodynamics in Physics subjects, energy cannot be created or destroyed, only transformed. In Bitcoin mining, electrical energy is transformed into heat and information processing. The electricity powers millions of tiny circuits inside specialized chips known as ASICs. As these circuits switch on and off billions of times per second, they produce heat, which is often removed using cooling systems or fans. This heat is the “waste energy” that inevitably escapes to the surroundings.

The second law of thermodynamics introduces the idea of entropy, which measures disorder in a system. When computers mine Bitcoin, they use large amounts of energy to perform calculations, and this increases the total entropy of the environment. In simple terms, Bitcoin mining converts electrical energy into less useful heat energy, spreading it into the surroundings. This is why large Bitcoin mining farms are often built in cold regions to reduce the cost of cooling and manage heat loss more efficiently.

There is also a link between information theory and physics. The act of creating a new block in the Bitcoin blockchain represents a physical process of storing and transferring information. Physicist Rolf Landauer once stated that “information is physical.” Each bit of data processed in Bitcoin mining requires a minimum amount of energy. This means that Bitcoin is not just a virtual system, it obeys the same physical limits as any other energy-driven process in nature.

From this point of view, Bitcoin demonstrates that even digital money depends on physical reality. Every transaction, every coin mined, and every block created carries an invisible cost measured in joules of energy and degrees of heat.

Reference :

1. Ahmad bin Hanbal. Musnad Ahmad (Hadith No. 20172).
2. Berita Harian. (2025, 24 October). TNB rugi hampir RM450 juta akibat curi elektrik oleh pengusaha. Link: https://www.bharian.com.my/berita/nasional/2024/10/1315467/tnb-rugi-hampir-rm450-juta-akibat-curi-elektrik-oleh-pengusaha.
3. Mohamd Laimon. (2025). Energy consumption of crypto mining: consequences and sustainable solutions using system thinking and system dynamics analysis. Sustainability, 17(8), 3522. https://doi.org/10.3390/su17083522

Prepared by, 

Senior Lecturer
Gs. Dr. Ya'akob Mansor
e-mel : yaakobms@upm.edu.my

Date of Input: 06/11/2025 | Updated: 12/11/2025 | hasniah