Electricity isn't free. In the US it's about $0.12/kWh. If I spend a kWh of electricity mining Bitcoin, I owe the electric company in my town another $0.12. Pre

Electricity isn't free. In the US it's about $0.12/kWh. If I spend a kWh of electricity mining Bitcoin, I owe the electric company in my town another $0.12. Presumably the electric company uses most of that $0.12 on the fuel and maintenance costs necessary to generate and provide me a kWh, costs which they would not have incurred but for my choice to mine Bitcoin. Incidentally, this is (as far as I understand) where most of the transaction fees ultimately end up. They're paid out to the miner who actually commits a transaction. Mining's a relatively competitive field so people aren't going to be able to charge much of a premium. The miners then have to turn around and use those fees to cover their costs, which in practice means their hardware costs and their electrical bills.