- In 2023, the global crypto ecosystem consumed as much electricity as Australia, accounting for up to 1% of global electricity demand.
- U.S. crypto mining electricity consumption is close to that of the whole state of West Virginia.
- The Electric Reliability Council of Texas received 41 G.W. demands for new cryptocurrency mining capacity, for which only 9 G.W. have been approved.
Following China’s ban on crypto mining in 2021, the United States has emerged as a key destination, hosting nearly half of the world’s Bitcoin mining activity. According to Banklesstimes.com, this shift has led to a significant uptick in electricity consumption, with crypto mining accounting for 2.3% of the nation’s total energy usage. The surge in energy demand has drawn the attention of policymakers and grid planners, prompting concerns about cost, stability, and environmental impact.
The CEO of BanklessTimes comments:
BanklessTimes CEOMany crypto mining facilities shifted to the U.S. after China’s crackdown on the digital asset space. While this provides a great opportunity for the digital space to expand and evolve in the U.S., the augmenting power consumption exacerbates the risks associated with climate change and global warming, challenging the U.S. government to think of solutions to sustain the power requirements and the environment.
U.S. Response to Bitcoin Mining and Energy Consumption
Bitcoin mining is anticipated to rise by over a third globally in 2024, hinting at a more aggravated power use and demand. With the U.S. mining’s power consumption on par with the State of Utah, the government can only brace itself for more energy production. Analysts predict the mining of digital coins will rise substantially to roughly 60TWh by the year’s end, similar to Israel’s combined electricity use.
This surge in energy demand poses a significant threat to the environment, as it will result in higher carbon dioxide emissions. Federal authorities are on high alert, as the U.S. already emits around 50 million tons of CO2 annually.
The Energy Information Administration (EIA) had begun mass acquisition of energy use data of about 137 mining facilities, given the increased pressure on electricity grids and the possible accentuation of climate change in the coming months. The primary goal of the data collection was to comprehend how fast the industry’s energy demand was evolving and the possible sustainable solutions that could be incorporated to meet energy demands.
However, the EIA survey hit a snag when Riot Platforms, one of the more significant Bitcoin miners, sued the government for the mandatory data requirements. As a result, U.S. officials called off the emergency survey, setting off negotiations with the Bitcoin mining plaintiffs to end the lawsuit.
What Can Be Done to Meet the Crypto Industry’s Energy Demands?
While Bitcoin miners use a lot of electricity, considering that more computational power is used to confirm transactions and solve algorithmic puzzles, Ethereum only uses roughly 0.005% of Bitcoin’s energy demand. Notably, Ethereum uses ‘proof of stake’ to authenticate transactions while adding new blocks to the blockchain, considerably using less computational power and electricity in the long run. Evidently, more energy would be saved if many other crypto companies focused on reducing their computational operations by deploying new strategies to verify and carry on transactions.
Amplifying the focus on renewables and low-cost energy sources like hydroelectric generators instead of burning fuels would ultimately help alleviate pressure on electricity grids and reduce the risks of intensified global warming.
