Some call this the future of finance, but digital cryptocurrencies, like gold, are still dependent on mining…but unlike gold, they are not mined in dark caves.
Cryptocurrency mining takes place online.
And like the gold rushes of old, crypto mines are popping up more and more, consuming huge amounts of electricity.
According to the US Energy Information Administration, between 2020 and 2023, crypto miners around the world used as much electricity as all of Australia.
Urges the U.S. government to collect data on industry energy use in the United States.
Ryan Braun – CNBC Crypto Correspondent: “People have long warned about the tremendous amount of energy required to mine Bitcoin.”
Cryptocurrency relies on miners exploring the internet and finding and recording cryptocurrency transactions by solving highly complex puzzles.
Every time you solve a puzzle, a block is added to the so-called block chain.
Ryan Braun – CNBC Crypto Correspondent: “When Person A sends Bitcoin to Person B, that transaction must be verified by a miner. Once the verification is complete, each part of the blockchain must be updated accordingly to that transaction. The miner then Get paid in Bitcoin.”
And with the increasing popularity of cryptocurrencies, many miners are looking for opportunities to make money.
According to the Cambridge Bitcoin Power Consumption Index, the share of Bitcoin mining in the United States rose from 3 points and 4 percent from January 20 to 20 to 37 points and 8 percent from January 20 to 22.
Concerns about the energy consumption of cryptomining have been growing in recent years. According to the New York Times, Bitcoin mining uses seven times more power than the entire Google uses in a year.
In the United States alone, cryptocurrency mining accounts for up to 2.3% of the country’s total electricity demand. Same as all of Utah or West Virginia.
The White House has approved an emergency data request that would allow the U.S. Energy Information Administration to require certain cryptocurrency miners to hand over details of their energy usage.
Statement from EIA Administrator Joe DeCarolis
“We specifically focused on how the energy demands of crypto mining are evolving, identifying high-growth geographic regions and determining the power sources used to meet the demand for crypto mining. Quantify it.”