Seven of the largest bitcoin mining companies in the United States are set to use almost the same amount of electricity as a home in Houston, according to data released Friday as part of an investigation by Congressional Democrats. .
The United States has seen an influx of cryptocurrency miners who use powerful, energy-intensive computers to create and track virtual currencies after China cracked down last year. Democrats, led by Senator Elizabeth Warren, are also urging companies to report their emissions of carbon dioxide, a greenhouse gas that is a major contributor to climate change.
“This limited data alone shows that cryptominers are large consumers of energy, accounting for a significant – and rapidly growing – amount of carbon emissions,” the senator said. Warren and five other members of Congress wrote a letter to the heads of the Environmental Protection Agency and the Department of Energy. “But little is known about the full scope of crypto mining activity,” they wrote.
Research has shown that the surge in crypto mining is also significantly increasing energy costs for local residents and small businesses and putting more strain on the power grid in states like Texas, the letter notes.
Cryptocurrencies like Bitcoin have grown exponentially since they were introduced over a decade ago, and in recent years there have also been concerns about cryptomining, the process of creating a virtual coin. This process is a complex guessing game using powerful and energy-intensive computers – very energy-intensive. Bitcoin mining around the world consumes more electricity than many countries.
Earlier this year, a group of Democrats in Congress launched an investigation into energy use by the nation’s largest cryptocurrency companies. They asked seven crypto mining companies for data on their operations, and the group’s findings, released on Friday, are based on the companies’ responses.
The data showed that just seven companies installed up to 1,045 megawatts of electricity, or enough electricity to power all residential buildings in a city the size of Houston, the country’s fourth-largest city of 2.3 million. The companies also said they plan to expand their facilities at an incredible rate.
One of the largest crypto mining companies in the United States, Marathon Digital Holdings, told investigators that it was operating nearly 33,000 highly specialized, energy-hungry computers known as “rigs” as of February, up from just over 2,000 at the start. 2021. By the beginning of next year, the company intends to bring this number to 199,000 drilling rigs, which is almost a hundred times more than in two years.
The company is currently operating cryptomining center powered by the Hardin Power Plant in Montana, which generates electricity by burning coal, the dirtiest fuel. But in April, Marathon announced that it would be moving those operations to “new locations with more sustainable energy sources” and that the company was moving towards carbon neutrality. He did not provide other details.
Crypto mining companies are often located near power sources due to the high demand for electricity.
Greenidge Generation Holdings, which operates a bitcoin mining center powered by a natural gas plant in upstate New York, said it expects to increase its mining capacity tenfold in several locations by 2025, including in South Carolina. and Texas. But New York last month refused to renew the facility’s air pollution permit, calling Greenidge’s cryptocurrency mining operations a threat to the state’s goal of limiting greenhouse gas emissions to fight climate change. Greenidge said it could continue to operate under its current permit, although it is contesting the state’s decision.
Overall, the top seven crypto mining companies are expected to increase their total mining capacity by at least 2,399 megawatts in the coming years, nearly 230 percent more than current levels, with enough energy to power 1.9 million homes.
Some cryptocurrency mining companies say they operate using renewable energy sources. Riot Blockchain, in response to a Senators’ request for information, pointed to its Coinmint mining facility in Massena, New York, which uses almost exclusively hydroelectric power. But its much larger facility in Winstone draws electricity from the Texas power grid, which uses coal or natural gas for more than 60 percent of its generating capacity, the letter said.
The company’s CEO, Jason Les, said in a statement that renewable energy in Texas continues to grow and that crypto miners have the ability to shut down during periods of high demand, reducing the load on the network.
Meanwhile, rising demand from crypto mining is also being blamed for the increase in local electricity bills. A study by researchers at the University of California, Berkeley found that the power consumption of cryptominers in upstate New York increased annual electricity bills about $165 million for small businesses and $79 million for individual households. This came out to about $71 extra a year for the average household, or about 6 percent more.
It was unclear how the recent cryptocurrency price slump would affect expansion plans. And the overall picture of the energy consumption of cryptominers outside of the seven companies was also unclear.
Given these concerns, Sept. Warren said in her letter that the EPA and DOE should work together to set rules that require crypto miners to report energy usage and emissions. This would allow the federal government to track energy use and trends in order to begin regulating a largely unregulated industry.
White House also examines policy recommendations To reduce energy consumption and emissions from cryptocurrency mining, Bloomberg Law reported last month.
China suppression of cryptocurrencies last year turned the world of cryptocurrencies upside down, causing a massive exodus of miners. Data collected by researchers from Cambridge shows that the United States currently the world’s largest bitcoin mining hubwhich is about 37 percent of the world’s hashrate, which is a measure of the processing power used for mining.