The US government just approved an emergency study to find out how much electricity crypto miners are pulling from the US power grid.
More specifically, the Energy Information Administration, part of the U.S. Department of Energy, was granted funding for a six-month study on the energy use of cryptocurrencies, which included a number of Includes collection and analysis of usage data.
EIA was justified [PDF] The investigation comes as the country’s ongoing severe cold snap and recent spike in Bitcoin prices, along with demand for digital money, could place an unnecessary strain on the U.S. power grid this year and push up electricity demand. It insists on urgency. people’s bills.
“Bitcoin prices have risen approximately 50% in the past three months, and rising prices will encourage more cryptomining activity, resulting in increased power Consumption will also increase.”
The combined impact of increased cryptomining and power system stress increases uncertainty in power markets
“At the time of this writing, much of the central United States is experiencing a major cold snap, resulting in increased demand for electricity. “Uncertainty has increased. Peaks in demand may occur, impacting system operations and consumer prices.”
Cryptocurrencies like Bitcoin use a system known as “proof of work” to verify transactions and add them to the blockchain, generating currency for miners in the process. This requires performing multiple calculations to solve increasingly difficult mathematical puzzles, and this is primarily performed by specialized mining hardware that consumes a significant amount of power.
Ethereum, the second most popular cryptocurrency by market capitalization after Bitcoin, switched to a “proof-of-stake” system in 2022 that aims to significantly reduce energy consumption. Various crypto coins use either proof of work or proof of stake.
Digiconimist, who has been tracking Bitcoin’s energy usage for years, claims that Bitcoin miners currently use an estimated 138 TWh of electrical energy per year, peaking at 205 TWh per year in the first half of 2022. ing. It seems that one Bitcoin transaction consumes approximately 762.89 kWh. This is the same amount of energy that the average American household uses in its 26.15 days.
Of course, consuming electricity generates a lot of heat, so using water for things like cooling is also stupid. According to Digiconimist, one Bitcoin transaction uses him 12,023 liters of H.2O – about the same amount as you would find in a modest backyard pool above ground, but the entire global Bitcoin mining industry is said to use about the same amount of water per year as Switzerland.
The energy usage of a cryptocurrency network increases or decreases depending on the price. As the value of Bitcoin continues to rise through most of 2023 and into this year, energy consumption by miners will only continue to rise.
Let’s take a quick look first
EIA plans to begin sending out surveys next week to 82 U.S. cryptomining companies, asking each company to provide details on their energy usage, including the electricity they generate.
“We used both top-down and bottom-up approaches to develop general estimates of electricity usage by crypto mining operations in the United States,” the administration announced Thursday. mentioned in the preliminary analysis.
“We plan to begin collecting data monthly from February to July 2024 to create a more accurate estimate of electricity usage by U.S. crypto miners.”
register We asked the EIA about the study’s ultimate goal, specifically whether it plans to use the data to develop limits or regulations on electricity use by cryptocurrency miners, but the agency did not respond. He refused and said he was just trying to understand.
“EIA is in a unique position to collect information directly from companies, and the data we collect will be useful in our assessments,” an EIA spokesperson said.
EIA develops a fundamental snapshot of cryptomining companies and their energy usage, quantifying how much energy usage by identified miners fluctuates, pinpointing energy sources, and determining whether cryptomining He said he would like to identify areas where they are concentrated.
“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. ,” De Carolis said in a canned statement.
EIA estimates that cryptocurrency mining accounts for 0.6 to 2.3 percent of total electricity consumption in the United States. The watchdog group said concerns from power grid operators have increased since China cracked down on cryptocurrency mining in 2021 and moved operations out of the Kingdom.
“The burden on the power grid during peak demand, the possibility of rising electricity prices, and the impact on energy-related carbon dioxide (CO2)2The EIA said “emissions” were all cited and “grid planners are also beginning to express concerns”.
The EIA’s approval for the cryptocurrency mining study expires on July 31, 2024. The findings over the next six months are said to determine whether the EIA receives funding to continue collecting and assembling this type of data. ®