ACurrently, the energy footprint of Bitcoin (BTC) hovers around 137.4 terawatt hours per year, which is equivalent to the energy consumption of an entire country. In fact, the cryptocurrency’s annual energy consumption currently sits between that of Ukraine and Egypt, countries with populations of over 40 and 100 million, respectively. The exorbitant energy demand of mining cryptocurrencies has drawn scorn and criticism from Bill Gates, Elon Musk, and now the United States Congress. The exact amount of energy used by Bitcoin miners in the United States can only be estimated. Mining operations are decentralized, anonymous and can easily fly under the radar, making quantifying their energy footprint a tricky task. Now US lawmakers are trying to change that. This week, eight Democratic members of Congress sent a letter to a few key bitcoin mining operations asking them to share information about “how much electricity they use, where it comes from, and how they plan to grow in United States”. Additionally, just last week, the House Energy & Commerce Committee held a monitoring hearing on the impact of cryptocurrency mining on energy held by the House Energy & Commerce Committee last week. .
The United States is not the only country to have clamped down on the excessive energy consumption of Bitcoin mining in recent months. Kazakhstan and Kosovo, poor countries with subsidized energy prices, have been sucked into crypto-mining operations capitalizing on the countries’ cheap electricity prices, and have both taken steps to temporarily ban or definitely this practice.
Bitcoin and similar blockchain-based cryptocurrencies suck up so much energy because they require the use of supercomputers to solve complex proof-of-work calculations, as well as fans to cool them. The first of these computers to solve a problem is rewarded with a fraction of Bitcoin, thereby incentivizing the adoption of increasingly power-intensive supercomputing systems. In order to keep the system secure and competitive, and to prevent bitcoin production from exploding with the number of computers joining the race, these issues become increasingly complex as more and more miners join. hunting, which means that each subsequent bitcoin requires more energy for mine than the one before. In 2009, you could mine Bitcoin using only seconds of household electricity. In 2021, you had to use about 9 years.
All of this means that Bitcoin mining is both environmentally friendly and extremely expensive. These factors have led many miners to get creative with the source of their energy. In places as remote as Siberia and West Texas, bitcoin miners are moving into oilfields to mine their operations from stranded natural gas, a byproduct of oil drilling that would normally just be vented straight away. in the air. In Pennsylvania, Bitcoin miners power their operations through the use of waste coal, “a combination of rock, coal, and other materials deemed unfit for combustion and left abandoned since the 1970s, when coal mines in the area have been closed,” according to an ABC report.
On the one hand, these miners are profiting from a hazardous waste that threatens to seep into water sources if left where they are, and are using already mined coal instead of encouraging further production. of coal. Similar arguments can be made for the natural gas that oilfield crypto miners divert from disposal. However, both of these cases are serious points of contention with environmentalists and climate-conscious critics, as both involve the burning of fossil fuels that ultimately release greenhouse gases into the atmosphere.
As Rob Altenburg, director of the environmental nonprofit Penn Future, told ABC of waste coal-fueled miners: “They don’t remove pollution. They move pollution. They move pollution from the earth and they move it into the air.
By Haley Zaremba for Oilprice.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.