Bitcoin mining and energy arbitrage

Bitcoin mining entails performing expensive computations to verify the legitimacy of Bitcoin transactions. Miners do this hoping that some of their calculations will meet the criteria necessary to mint and claim new Bitcoins that they can later spend / sell. But, because these computations are well-understood and everyone has access to hardware that is custom built for the task, there is little differentiation between miners except for the amount of computing power they can deploy.

In effect, Bitcoin mining is a process that turns electrical power into digital currency. So, if you have access to cheap power, your cost per computation is lower than everyone else's while your expected return per computation remains the same. Additionally, if you can harness / sell the heat that's generated by the computations instead of immediately neutralizing it with air conditioning, there's another revenue generating opportunity.

P.S. Here's a calculator to help to estimate the profits you can expect.