Bitcoin and several other cryptocurrencies rely on many high-performance computers that perform advanced calculations. This is known as “cryptocurrency mining,” and it consumes as much as 2% of all electricity in the United States, according to the Energy Information Administration.
Starting this week, the federal agency will begin collecting information from crypto mining companies about where and how their electricity is used, but the crypto industry has been reluctant to release that information publicly.
A few years ago, when Colin Reed was mayor of Plattsburgh, New York, the small city had just welcomed Bitcoin mining operations to town.
They came with racks and racks of computer servers to take advantage of Plattsburgh’s cheap hydroelectric power. At least it was cheap, up to a point.
“If you exceed that quota because there are Bitcoins in circulation, you have to buy more power on the spot market, which means interest rates for everyone will go up quite a bit,” Reid said. Ta.
Reed, who is also a professor of economics at the State University of New York at Plattsburgh, wants more transparency about the industry’s energy use.
But “the industry probably doesn’t want to tell the full story,” he says.
Lee Bratcher, president of the Texas Blockchain Council, says the industry is not afraid of data collection. “All we are concerned about is how this data collection is being done,” he said.
Bratcher argues that releasing what the Fed calls confidential information could put mining companies at a competitive disadvantage.
He added that the industry is exploring how to respond to the EIA request, including whether to take legal action.
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