The Rapid Growth of Cryptocurrency Mining Threatens to Slow the US transition to clean energy
The six largest American crypto-mining companies already use as much electricity as all the houses in the city of Houston. Over the next three years, these companies plan to triple their electricity consumption until they absorb enough energy to power all homes in the cities of Houston, Los Angeles and Miami.
Crypto miners use energy-intensive computers to solve complex mathematical problems as part of the process of minting cryptocurrencies such as Bitcoin and Ethereum. Members of the US Congress launched an investigation into electricity consumption by the largest mining companies last year and disclosed their plans for energy use and expansion in a letter dated July 15 to the US Environmental Protection Agency.
"The results of our investigation, which collected data from just seven companies, are alarming because these limited data alone show that crypto miners are large energy consumers, accounting for a significant - and rapidly growing - amount of carbon emissions," the investigators wrote.
Cryptocurrency mining is not the only reason for the slow US action on climate change and is not one of the industries most responsible for carbon emissions in the US. But it is an electric-intensive industry that is growing rapidly and has high hopes of replacing the global financial system, which will undoubtedly require much more scaling and the use of much more power.
In their responses to requests from Congressional investigators, mining companies note that cryptocurrencies such as Bitcoin account for less than 1% of global electricity demand. For example, Riot Blockchain, stressed that some of their facilities use 100% renewable energy. Others, such as Greenidge, claim that their activities are carbon neutral because they buy carbon offsets. Stronghold Digital Mining has argued that its coal-fired power generator helps the environment by eliminating dangerous piles of discarded coal left over from abandoned mines.
But the miners' efforts to combat climate change have not impressed Congressional investigators.
"These and similar promises about the use of clean energy hide a simple fact," they wrote in their letter to the EPA. "Bitcoin miners use a huge amount of electricity that could be used for other priority purposes that contribute to achieving our goals in the field of electrification and environmental protection, such as replacing home stoves with heat pumps."
Adding gigawatts of additional electricity demand to the grid will inevitably slow the U.S. transition from fossil fuels to renewable energy sources. The country is already lagging behind US President Joe Biden's goal of creating a zero-carbon energy system by 2035. The country is committed to building wind turbines, solar panels, high-power transmission lines and storage batteries to replace the burning of coal and natural gas as soon as possible. Every gigawatt of renewable energy that needs to be redirected to new capacities for mining cryptocurrencies is a gigawatt that does not go to replace coal and gas power plants.
By 2025, cryptocurrency miners plan to triple energy consumption in the United States
Until last year, most Bitcoin mining took place in China. However, in May 2021, China began the fight against cryptocurrencies. Cryptocurrency mining in China has stopped, and cryptocurrency mining in the United States has increased dramatically.
Six of the seven largest crypto-mining companies in the United States have provided Congressional investigators with data on their current electricity consumption and plans for future expansion. One company, Bitfury, responded to a Congressional request, but did not provide accurate data on its energy consumption. These companies plan to build hundreds of thousands of new mining installations by 2025 - computers designed for cryptocurrency mining. In the next three years, they will consume at least 2.4 additional gigawatts of electricity.
The 2.4 gigawatts of power that the planned mining installations will consume is equal to approximately 1.3% of the planned 186.8 gigawatts of wind and solar power plants that are planned to be built in the United States by 2025.
With 2.4 gigawatts of renewable electricity capacity, you can:
- Supply electricity to 1.9 million homes in the United States without harmful emissions, or charge 5.2 million electric vehicles per year without emissions.
Or, of course, one could:
- To mine about 150,000 Bitcoins a year worth $3.4 billion at current prices.
The cryptocurrency mining industry is already having a small but noticeable impact on the US energy transition. As it continues to grow, its impact on the climate will only increase.
https://coin-signal.com/cryptonews/the-rapid-growth-of-cryptocurrency-mining-threatens-to-slow-the-us-transition-to-clean-energy/
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