The largest cryptominers in the US consume as much energy as Houston, the results show

Seven of the largest bitcoin mining companies in the United States could collectively use as much electricity as nearly every home in Houston would power, according to data released Friday as part of an investigation by congressional Democrats who say miners are being enlisted should report their energy consumption.

The United States has seen an influx of cryptocurrency miners, who use powerful, energy-intensive computers to create and track the virtual currencies, after China cracked down on the practice last year. Democrats led by Senator Elizabeth Warren are also asking companies to report their emissions of carbon dioxide, the greenhouse gas that is the main cause of climate change.

“This limited data alone shows that cryptominers are large consumers of energy, responsible for a significant — and rapidly growing — amount of carbon emissions,” Sen. Warren and five other members of Congress wrote in a letter to heads of the Environmental Protection Agency and energy authority. “But little is known about the full scope of cryptomining activity,” they wrote.

Research has shown that a surge in cryptomining is also significantly increasing energy bills for residents and small businesses, putting additional strain on the power grid in states like Texas, the letter said.

Cryptocurrencies like Bitcoin have grown exponentially since their inception more than a decade ago, and in recent years there have also been concerns about cryptomining, the process of creating a virtual coin. This process, a complex guessing game with powerful and energy-hungry computers, is very energy-intensive. Bitcoin mining uses more electricity worldwide than many countries.

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

That data showed that the seven companies alone had tapped up to 1,045 megawatts of power, or enough electricity to power all homes in a city the size of Houston, the nation’s fourth-largest city of 2.3 million people. The companies also said they plan to expand capacity at a breathtaking pace.

One of the largest crypto-mining companies in the United States, Marathon Digital Holdings, told the probe that it was operating nearly 33,000 highly specialized, power-intensive computers called “mining rigs” as of February, up from just over 2,000 at the start of 2021 By early next year, that number is expected to rise to 199,000 rigs, a nearly 100-fold increase in two years, it said.

The company currently operates a crypto mining center powered by Montana’s Hardin Generating Station, which generates electricity by burning coal, the dirtiest fuel. But in April, Marathon announced it would move those operations to “new locations with more sustainable energy sources” and that the company was on its way to becoming carbon neutral. It did not provide any further details.

Cryptomining companies are often located near power sources due to their high power requirements.

Greenidge Generation Holdings, which operates a bitcoin mining center powered by a natural gas facility in upstate New York, said it expects to increase its mining capacity tenfold in several locations, including South Carolina and Texas, by 2025. But New York last month refused to renew an air pollution permit for the facility, calling Greenidge’s cryptomining operations a threat to the state’s goals to limit emissions of greenhouse gases to combat climate change. Greenidge has said it could continue operating under its current permit while it is appealing the state’s decision.

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

Some crypto mining companies state that they work with renewable energy. Riot Blockchain, in its response to the senators’ request for information, referred to its Coinmint mining facility in Massena, NY, which uses almost exclusively hydroelectric power. But its far larger facility in Whinstone gets 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 chief executive officer, Jason Les, said in a statement that renewable energy would continue to be pushed in Texas. And cryptominers had the flexibility to shut down during periods of high demand, relieving the grid.

Meanwhile, increasing demand from crypto mining has also been blamed for driving up local utility bills. A study by researchers at the University of California, Berkeley found that the electricity demand of cryptominers in New York state has added about $165 million to annual electricity bills for small businesses and $79 million for homes. That was about $71 more per year for the average household, or an increase of about 6 percent.

It was unclear how a recent plunge in cryptocurrency prices would affect expansion plans. And the overall picture of the energy consumption of cryptominers beyond the seven companies was not clear either.

Given these concerns, Sen. Warren said in her 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 in anticipation of the start of regulation of a largely unregulated industry.

The White House is also considering policy recommendations to reduce the energy use and carbon footprint of cryptocurrency mining, Bloomberg Law reported last month.

China’s crackdown on cryptocurrencies has turned the crypto world upside down over the past year, sparking a mass exodus 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 hashrate, a measure of the computing power used for mining.

Leave a Comment

Your email address will not be published.