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Monday, September 26, 2022

Findings indicate that the energy consumption of cryptocurrency mining in the United States is comparable to that of Houston

According to data that was made public on Friday as part of an investigation by congressional Democrats who say miners should be required to report their energy use, seven of the largest Bitcoin mining companies in the United States are set up to use nearly as much electricity as the homes in Houston. This information was revealed as part of the investigation.

After China began to tighten down on the practise of mining cryptocurrencies a year ago, a lot of people moved to the United States in order to continue doing it. Mining cryptocurrencies requires very powerful and energy-intensive machines in order to produce and monitor the virtual currencies. In addition, Democrats, spearheaded by Senator Elizabeth Warren, are demanding that businesses record their emissions of carbon dioxide, the greenhouse gas that is the primary contributor to climate change.

In a letter to the heads of the Environmental Protection Agency and the Department of Energy, Senator Elizabeth Warren and five other members of Congress wrote, “This limited data alone reveals that cryptominers are large energy users that account for a significant — and rapidly growing — amount of carbon emissions.” They said that “very little is known about the actual breadth of cryptomining activities,” which is an understatement.

According to the letter, research has revealed that an increase in cryptomining is dramatically driving up the expenses of electricity for local households as well as for small companies. This has also contributed to the pressure that is being placed on the power system in places such as Texas.

Since its inception more than a decade ago, cryptocurrencies like Bitcoin have seen exponential growth. In the recent years, however, there has been an increase in worries around cryptomining, which refers to the process of manufacturing a virtual currency. This procedure, which involves playing a difficult guessing game utilising sophisticated computers that use a lot of electricity, uses a lot of energy. The mining of bitcoins worldwide consumes more power than a great number of nations.

A number of Democrats in Congress started an inquiry at the beginning of this year into the energy use of the most prominent cryptocurrency mining operations in the nation. They sent out requests for data on the activities of seven different cryptomining businesses and based their conclusions, which were released on Friday, on the replies they received from those companies.

This data indicated that the seven businesses alone had set up to tap as much as 1,045 megawatts of power. This is equivalent to the amount of energy required to power all of the homes in Houston, which is the fourth-largest city in the United States and has 2.3 million inhabitants. The corporations have also disclosed that they have ambitious plans to significantly increase their production levels.

Marathon Digital Holdings, one of the largest cryptocurrency mining companies in the United States, disclosed during the investigation that as of February it operated almost 33,000 highly specialised and power-intensive computers known as “mining rigs.” This number represents a significant increase from the slightly more than 2,000 mining rigs that it operated at the beginning of 2021. It has said that its goal is to grow this number to 199,000 rigs by the beginning of the following year, which would represent an almost hundredfold increase in only two years.

Some cryptocurrency mining operations claim to run on energy derived from renewable sources. In its answer to the senators’ request for information, Riot Blockchain mentioned its Coinmint mining plant in Massena, New York, which runs nearly entirely on hydroelectricity. The facility is located in that state. According to the letter, however, the far bigger Whinstone plant gets its electricity from the Texas grid, which gets more than 60 percent of its generating capacity from coal or natural gas.

Increasing demand from cryptomining has been blamed, along with other factors, for pushing up the cost of power in local areas. According to the findings of a study conducted by academics at the University of California, Berkeley, the increased electricity consumption caused by cryptominers in upstate New York has resulted in an increase of approximately $165 million in annual electric bills for small businesses and $79 million for individual households. This resulted in an additional cost of around $71 per year for the typical family home, which corresponds to an increase of almost 6 percent.

A widespread migration of cryptocurrency miners took place in 2018 as a direct result of China’s ongoing crackdown on virtual currencies. The United States is now the greatest Bitcoin mining centre in the world, according to data that was collated by academics at Cambridge. The United States accounts for around 37 percent of the worldwide hashrate, which is a measure of the processing power that is used for mining.

Jonathan James
I serve as a Senior Executive Journalist of The National Era
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