Cryptomining Power in US Competitors in Houston Energy Use, Findings Show

The seven largest bitcoin mining companies in the United States are designed to use as much electricity as a Houston home, according to data released Friday as part of an investigation by congressional Democrats who say miners should be required to report their energy use. .

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 on the practice last year. Democrats led by Sen. Elizabeth Warren are also calling on companies to report emissions of carbon dioxide, a greenhouse gas that is a major driver of climate change.

“This limited data alone shows that cryptominers are large energy users, contributing to a significant and rapidly increasing amount of carbon emissions,” Senator Warren and five other members of Congress wrote in a letter to the Environmental Protection Agency. Department of Energy. “But little is known about the full extent of cryptomining activity,” they write.

The study found that the growth of cryptomining also significantly increases energy costs for local residents and small businesses and adds stress to the power grid in states such as Texas, the letter said.

Cryptocurrencies like Bitcoin have grown exponentially since they were introduced more than a decade ago, and in recent years, so have concerns about cryptomining, the process of creating virtual currency. This process, a complex guessing game that uses powerful and powerful computers, is very energy intensive. Worldwide, Bitcoin mining uses more electricity than most countries.

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

The data showed that just seven companies generated 1,045 megawatts of power, or enough electricity to power all the homes in a city the size of Houston, the nation’s fourth largest, with a population of 2.3 million. The companies also said they plan to expand their capabilities at an eye-popping pace.

Marathon Digital Holdings, one of the largest cryptomining companies in the United States, told the inquiry it had nearly 33,000 highly specialized, power-intensive computers known as “miners” in operation as of February, up from 2,000 initially. in 2021. It plans to increase that number to 199,000 by early next year, a nearly hundredfold increase in two years, it said.

The company currently operates a cryptomining center powered by the Hardin Generating Station in Montana, which generates electricity by burning coal, the dirtiest fuel. But in April, Marathon announced that it would move those operations to “new locations with more sustainable energy sources” and that the company was moving toward carbon neutrality. He did not give further details.

Cryptomining 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 New York state, said it expects to increase its mining capacity tenfold in multiple locations, including South Carolina and Texas, by 2025. But in New York last month. refused to renew the facility’s air pollution permit, calling Greenidge’s cryptomining operations a threat to the state’s goal of limiting greenhouse gas emissions to combat climate change. Greenidge said he can continue to operate under his current permit as long as he appeals the state’s decision.

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

Some cryptomining companies say they run on renewable energy. Riot Blockchain, in a response it provided to the senators’ request for information, pointed to its Coinmint mining facility in Massena, New York, which uses hydroelectricity almost exclusively. But its much larger Whinstone facility draws power from the Texas grid, which relies on coal or natural gas for more than 60 percent of its generating capacity, the letter said.

The company’s CEO, Jason Less, said in a statement that renewable energy continued to grow in Texas, and cryptominers had the flexibility to shut down during periods of high demand, relieving pressure on the grid.

At the same time, the growing demand for cryptomining has also been blamed for increasing local electricity bills. A study conducted by researchers at the University of California, Berkeley, found that the electricity needs of cryptominers pushed annual electricity bills for small businesses by about $165 million, and for individual households by $79 million. That came out to about $71 more per year for the average family, or about a 6 percent increase.

It was unclear how the recent drop in cryptocurrency prices would affect the expansion plans. And the overall picture of cryptominers’ energy usage beyond the seven companies was also not clear.

In light of these concerns, Senator Warren said in his letter that the EPA and DOE should work together to establish rules that would require cryptominers 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 studying policy recommendations to reduce energy use and emissions from cryptocurrency mining, Bloomberg Law reported last month.

China’s crackdown on cryptocurrencies rocked the crypto world last year, leading to a mass exodus of miners. Data compiled by Cambridge researchers shows that the United States is now the world’s largest bitcoin mining hub, accounting for about 37 percent of the global hashrate, a measure of computing power for mining.

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