Cryptocurrencies like Bitcoin and Ethereum have no intrinsic value. They exist only as numbers. blockchainand they are worth whatever they are A volatile market They say that a moment has value.
But even if cryptocurrencies have no real-world value, they always have real-world costs. This is because finding the magic number for each currency requires solving mathematical formulas that are intentionally difficult to implement. Completing these calculations will require more and more specialized computing hardware over time, and more and more energy.
As a new report from energy information bureau As a warning, cryptocurrency “mining” currently consumes up to 2.3% of the electricity produced in the United States. What’s more, that electricity includes some of the dirtiest electricity in the United States. It also directly impacts consumers’ electricity bills while lining the pockets of companies mining “digital gold.”
New report shows: rapid increase As for a 2022 report that estimated that cryptocurrencies already consume 1.7% of US electricity. According to the EIA, the amount in 2022 was “as much as every home computer or residential light in the United States.” Currently, the consumption of cryptocurrencies is increasing even more, and a new report points out that there have been incidents where “a sudden surge in cryptomining has caused electricity prices to soar.”
as texas tribune It was reported in January that a Bitcoin mining company made millions of dollars by taking advantage of Texas’ managed energy market during last summer’s heatwave. When Texans were suffering, record heat Forced to reduce power usage, crypto mining company Riot Platforms sold $32 million in power credits it had purchased during the market downturn.
In the Texas electricity market, major energy companies jackpot During emergencies when the demand for electricity increases. Some companies make more profits from the sale of energy credits than they earned in one day of normal business operations.
However, consumers cannot play this game. Instead, companies pay an inflated price for the power they sell back to the grid at a profit. In the case of cryptocurrency miners, companies can receive large salaries because miners are very large consumers of electricity.
“I think the rewards for their actions are too lucrative and unfair,” said Mandy DeRoche, deputy chief attorney at the nonprofit environmental organization Earthjustice. “It’s like bending over backwards to give money to the (cryptocurrency) miners who are burdening the grid and the system in the first place.”
as CBS News It noted that the cash injection from Texas power grid operator ERCOT has lowered Bitcoin mining costs for Riot Platforms and increased its profit per coin. Riot Platforms’ CEO said this is “a key element in making Riot one of the industry’s lowest-cost Bitcoin producers.”
In other words, Texas is making Bitcoin mining cheaper for small-scale consumers by forcing them to pay cryptocurrency miners’ energy fees.
But reaching into people’s pockets for discounts may be one of the more sensible activities of these crypto mining companies. Across the country, cryptocurrency mining is powering up broken coal-fired and gas power plants to keep them running.according to sierraAccording to Sierra Club magazine, some of these plants use waste coal left over from previous mining, especially since it contains high levels of sulfur, mercury, lead, and other contaminants. Now it’s being burned for Bitcoin.
Loopholes allow some of these operations to circumvent requirements that typically apply to power plants, even though they operate at a scale capable of powering thousands of homes. During the Trump administration, EPA regulations have been relaxedBecause the power stays “behind the meter” rather than being sent to consumers, miners can use vast amounts of power with little oversight. Because they are not regulated as power producers, most crypto mining companies can avoid reporting emissions under the Clean Air Act.
According to a 2018 study: nature climate change We predict that greenhouse gas emissions from crypto mining alone will be enough to raise global average temperatures by 2 degrees Celsius over the next 30 years.
Senator Ed Markey introduced the following: Crypto Asset Environmental Transparency Act The bill would require the EPA to conduct studies on the effects of cryptocurrency mining and regulate mining operations larger than 5 megawatts. However, no further action has been taken on this bill.
Cryptocurrency is imaginary. However, the impact of cryptocurrency creation is real. These impact real consumer wallets and, thanks to lax regulations, impact the entire world by emitting more greenhouse gases and other pollutants.
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