US Crypto Mining Capacity Rivals Houston’s Energy Use, Findings Show

Seven of the largest Bitcoin mining companies in the United States are set to use nearly as much electricity as homes in Houston, according to data released Friday as part of an investigation released Friday by congressional Democrats who say miners should report their energy use. .

After China crashed the app last year, the United States has seen an influx of cryptocurrency miners using powerful, energy-intensive computers to create and track virtual currencies. Democrats, led by Senator Elizabeth Warren, are also urging companies to report their emissions of carbon dioxide, the greenhouse gas that is the main driver of climate change.

“This limited data alone reveals that crypto miners are major energy users, causing significant and rapidly increasing amounts of carbon emissions,” Senator Warren and five other members of Congress said in a letter to the heads of the Environmental Protection Agency. Energy Division. “But little is known about the full scope of crypto mining activity,” they wrote.

In the letter, research showed that an increase in crypto mining has significantly increased energy costs for local residents and small businesses, increasing the load on the power grid in states like Texas.

Cryptocurrencies like Bitcoin have grown exponentially since their launch over a decade ago, and in recent years there have also been concerns about crypto mining, the process of creating virtual money. A complex guessing game using powerful and power-hungry computers, this process is highly energy-intensive. Worldwide, Bitcoin mining uses more electricity than many countries.

Earlier this year, a group of congressmen launched an investigation into the use of energy at the nation’s largest crypto mining companies. They asked seven crypto mining companies for data on their operations, and the group’s findings, published Friday, are based on the companies’ responses.

These data showed that seven companies alone installed up to 1,045 megawatts, or enough electricity to power all residences in a city the size of Houston, the country’s fourth-largest city of 2.3 million inhabitants. The companies also said they plan to increase their capacity at a dazzling rate.

Marathon Digital Holdings, one of the largest crypto-mining companies in the United States, told the investigation that it operated approximately 33,000 highly specialized, power-intensive computers, known as “mining rigs,” as of February, which initially numbered just over 2,000. Early next year, he said he plans to increase that number to 199,000 towers, an increase of almost a hundredfold in two years.

The company currently operates a crypto mining hub powered by the Hardin Generating Station in Montana that generates electricity by burning the dirtiest fuel, coal. But in April, Marathon announced that it would move these operations to “new locations with more sustainable power sources,” and that the company was on track to achieve carbon neutrality. He did not give further details.

Crypto mining companies are often located near power sources due to their high electricity demands.

Greenidge Generation Holdings, which operates a Bitcoin mining center powered by a natural gas plant out of New York state, said it expects to increase mining capacity tenfold by 2025 in multiple locations, including South Carolina and Texas. But last month New York refused to renew its air pollution permit for the facility, calling Greenidge’s crypto mining operations a threat to the state’s goals to limit greenhouse gas emissions to combat climate change. Greenidge said he could continue to operate with his current permit while appealing the state’s decision.

Overall, the seven largest crypto mining companies are expected to increase their total mining capacity by at least 2,399 megawatts, an increase of about 230 percent from current levels, and enough energy to power 1.9 million homes in the coming years.

Some crypto mining companies say they are operating using renewable energy. In its response to the Senators’ request for information, Riot Blockchain pointed to the Coinmint mining facility in Massena, NY, which uses hydropower almost exclusively. However, the letter said the much larger Whinstone plant is powered by the Texas grid, which relies on coal or natural gas for more than 60 percent of its generating capacity.

The company’s CEO, Jason Les, said in a statement that renewable energy in Texas continues to grow, and crypto miners have the flexibility to shut down during periods of high demand, easing the pressure on the grid.

Meanwhile, increased demand from crypto mining has also been blamed for increasing local electricity bills. A study by researchers at the University of California at Berkeley found that the power demands of crypto miners in New York increased their annual electricity bills by about $165 million for small businesses and $79 million for individual households. This equated to about $71 a year surplus for the average household, or an increase of about 6 percent.

It was unclear how the recent drop in cryptocurrency prices will affect expansion plans. And the overall picture of crypto miners’ energy use beyond the seven companies wasn’t clear either.

Given these concerns, Senator Warren said in his letter that the EPA and DOE should work together to create rules that would require crypto miners to report their energy use and emissions. This would allow the federal government to monitor energy use and trends to begin regulating a largely unregulated industry.

The White House is also working on policy recommendations to reduce the energy consumption and emissions footprint of cryptocurrency mining, Bloomberg Law reported last month.

China’s crackdown on cryptocurrencies turned the crypto world upside down last year, triggering a mass exit of miners. Data compiled by researchers in Cambridge shows that the United States is now the world’s largest Bitcoin mining center, accounting for about 37 percent of the global hash rate, a measure of the computing power used for mining.

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