The Biden administration is imposing new reporting requirements on all U.S. cryptocurrency miners to disclose data on their electricity consumption.
The so-called “urgent investigation” marks another attempt by the US government to rein in the negative excesses of Bitcoin mining, which Democrats have widely criticized as polluting the environment.
Bitcoin mining emergency investigation
The Energy Information Administration (EIA) will begin investigating next week to determine how many mining companies they own, where they operate them, and whether they use proof of work (POW) or proof of stake (POS). Ask questions about whether you are working with virtual currencies. consensus mechanism.
“We specifically focused on how the energy demands of crypto mining are evolving, identifying high-growth geographic regions and quantifying the power sources used to meet crypto mining demand. EIA Director Joe DeCarolis said in a statement Wednesday.
Miners must submit data monthly and failure to do so could result in “criminal fines, civil penalties, and other sanctions.”
The EIA’s official submission said the investigation request needed to be dealt with urgently “as there is a substantial likelihood of public harm occurring if normal procedures were followed”.
As evidence of this, the EIA cited the 50% rise in the price of Bitcoin over the past three months as evidence that the mining industry has the potential to expand significantly in the short term.
“Increasing prices will encourage more cryptocurrency mining activities, resulting in increased electricity consumption,” the EIA said.
The report also noted that the large-scale “cold wave” currently hitting the United States is increasing demand for electricity and increasing stress on the power grid. The combined effects of Bitcoin mining and power system stress “could result in peaks in demand, impacting system operations and consumer prices,” the agency wrote.
Addressing Bitcoin’s energy issues
Regions like Texas have historically gotten around this problem by establishing mining and demand response programs. The program requires miners to turn off their machines during periods of high load on the power grid, while providing subsidies to miners during off-time.
Regarding environmental issues, previous research and analysis has estimated that Bitcoin has a green energy composition ratio of over 50%, making it one of the most sustainable power industries on the planet.
The Biden administration previously unsuccessfully tried to impose a 30% tax on Bitcoin miners to stop environmental damage.