In a pivotal move, the U.S. Energy Information Administration (EIA) will collect data on cryptocurrency miners’ electricity usage. The move is in line with environmental concerns as Bitcoin’s halving approaches.
Starting next week, selected crypto miners will be required to report their electricity consumption in detail. This follows his January 26, 2024 directive from the Office of Management and Budget.
Why US EIA wants to collect data on virtual currency miners
EIA claims the initiative is aimed at collecting data and sparking a public conversation. Therefore, the authorities are opening a forum for public debate on this vitally important issue and inviting comments on the energy consumption patterns of crypto miners.
EIA Administrator Joe DeCarolis highlighted the agency’s efforts to analyze the energy footprint of cryptocurrency mining within U.S. borders.
Read more: Will crypto mining be profitable in 2024?
“We will continue to analyze and write about the energy impacts of crypto mining activities in the United States. We will specifically focus on how the energy demands of crypto mining are evolving, We will identify high-growth geographic regions and quantify the power sources used to meet the demand for crypto mining,” De Carolis said.
As mining operations move from China to the United States, demand for energy in some parts of the country is skyrocketing. This has raised eyebrows among regulators, with U.S. officials expressing concern about the surge in energy use.
The timing of this study coincides with the upcoming Bitcoin halving. This event will reduce mining rewards and double the cost of mining each Bitcoin. Miners are currently competing to expand their setup. Bitcoin hash rate and mining difficulty are at an all-time high. This halving event will test miners and force them to adapt or retreat.
Read more: Bitcoin Halving Cycle and Investment Strategies: What You Need to Know
Mining Bitcoin and similar cryptocurrencies is energy-intensive. Solving the complex problems of validating blockchain transactions requires powerful computers. This process consumes a large amount of power. Competition among miners for Bitcoin rewards is fierce.
The environmental impact of cryptocurrency mining, especially proof-of-work tokens like Bitcoin, has been a hot topic. Critics point to the high energy use and liken it to the electricity consumption of an entire country. In response, the mining sector is gradually turning towards environmentally friendly initiatives.