February 5, 2023

Seven of the largest U.S. bitcoin mining companies use nearly as much electricity as homes in Houston, according to data disclosed on Friday, as part of an investigation by congressional Democrats who say miners should be required to report on their energy usage.

After China cracked down on the practice last year, the U.S. has seen an influx of cryptocurrency miners using powerful, energy-intensive computers to create and track virtual currencies. Democrats, led by Senator Elizabeth Warren, have also called on the companies to report their carbon dioxide emissions, a major driver of climate change.

“These limited data alone show that crypto miners are large energy users with large and rapidly growing carbon emissions,” Sen. Warren and five other members of Congress wrote in a letter to the Environmental Protection Agency and the head of the EPA road. Department of Energy. “But little is known about the full scope of crypto activity,” they wrote.

The letter states that research has shown that the surge in crypto mining has also significantly raised energy costs for local residents and small businesses, and added stress to the grid in states like Texas.

Cryptocurrencies like Bitcoin have grown exponentially since their launch more than a decade ago, and concerns about cryptocurrency mining (the process of creating virtual coins) have grown in recent years. The process is a complex guessing game, using powerful and power-hungry computers that consume a lot of energy. Globally, Bitcoin mining uses more electricity than many countries.

Earlier this year, a group of congressional Democrats launched an investigation into the energy use of the largest U.S. crypto mining company. They asked seven cryptocurrency companies to provide data on their operations, and the group’s findings released Friday were based on the companies’ responses.

Those seven companies alone have installed as much as 1,045 megawatts of power, or enough power to power all the homes in Houston, the fourth-largest U.S. city with 2.3 million residents, the data shows. The companies also said they plan to expand capacity at a breakneck pace.

Marathon Digital Holdings, one of the largest U.S. cryptocurrency mining companies, told the survey that as of February, it operated nearly 33,000 highly specialized, power-intensive computers known as “miners,” up from just 2,000 to begin with. multiple. 2021. It said that by early next year, it intends to raise that number to 199,000 units, a nearly 100-fold increase in two years.

The company is currently operating Crypto Mining Center Powered by the Harding Power Station in Montana, which produces 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 moving toward its goal of becoming carbon neutral. It did not provide further details.

Crypto mining companies are often located near power sources because of their high demand for electricity.

Greenidge Generation Holdings, which operates a Bitcoin mining center powered by natural gas plants in upstate New York, said it expects to mine mining operations at multiple locations including South Carolina and Texas by 2025. Mining capacity will be increased by 10 times. But last month in New York refused to renew an air pollution permit for the facility, saying Greenidge’s crypto mining operations posed a threat to the state’s goal of limiting greenhouse gas emissions to combat climate change. Greenidge has said it can continue to operate under its current license while challenging the state’s decision.

Overall, the seven largest cryptocurrency mining companies are expected to add at least 2,399 megawatts of total mining capacity over the next few years, an increase of nearly 230% from current levels, and enough energy to power 1.9 million homes.

Some cryptocurrency companies say they operate on renewable energy. In response to the senator’s request for information, Riot Blockchain noted that its Coinmint mining facility in Massena, N.Y., runs almost entirely on hydroelectric power. But its larger Wheatstone facility draws power from the Texas grid, which relies on coal or natural gas for more than 60 percent of its electricity, the letter said.

Renewable energy continues to grow in Texas, and crypto miners can flexibly shut down during periods of high demand, reducing stress on the grid, CEO Jason Les said in a statement.

Meanwhile, a surge in demand for crypto mining has also been blamed for driving up local electricity bills.A study by researchers at the University of California, Berkeley, found that the electricity needs of crypto miners in upstate New York Driving up annual electricity bills About $165 million for small businesses and about $79 million for individual households. For the average household, that translates to about an additional $71 a year, or about 6 percent.

It is unclear how the recent plunge in cryptocurrency prices will affect expansion plans. The overall picture of energy use by crypto miners outside the seven companies is also unclear.

In light of these concerns, Senator Warren said in her letter that the EPA and DOE should work together to create rules requiring crypto miners to report their energy use and emissions. This would allow the federal government to monitor energy use and trends, with an eye toward starting to regulate a largely unregulated industry.

White House Also working on policy proposals Bloomberg Law reported last month in an effort to reduce the energy consumption and emissions footprint of cryptocurrency mining.

Last year, China’s crackdown on cryptocurrencies upended the crypto world, sparking a massive exodus of miners.Data compiled by Cambridge researchers show that the U.S. Now the largest bitcoin mining center in the worldwhich accounts for about 37% of the global hash rate, a measure of computing power used for mining.



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