Because Bitcoin mining requires a large amount of energy, a number of towns in the United States are considering placing moratoriums or outright bans on cryptocurrency operations. Mining activities for Bitcoin (BTC), according to opponents, are contributing to an increase in the cost of electricity and a return of dirtier sources of power.
Bitcoin Mining Uses as Much Annual Energy Budget as Argentina
To some, Bitcoin — the most valuable and well-known of the 10,000 or so cryptocurrencies currently in circulation — is merely a pyramid scheme; to others, it looks like the future of money: decentralized, unregulated, and tracked on a blockchain, a virtual ledger in the digital cloud that anyone can inspect. However, its manufacture necessitates massive amounts of electricity. According to Cambridge University‘s Bitcoin Electricity Consumption Index, the world’s total Bitcoin mining operations had an annual energy budget approximately equal to the entire country of Argentina, the Czech Republic, or all the tea kettles in England boiling water for 26 years in May of 2022.
The right answer is recorded on the Bitcoin blockchain, and the winner receives 6.2 Bitcoins as a prize. That isn’t as much money as it formerly was: currently, each coin is worth around $20,000, down from a high of just under $68,000 in November 2021.
Proof-of-work (PoW) cryptocurrency mining has not been embraced in every part of the globe due to its high electricity demand. To maximize their profitability, miners seek low-cost energy, but their energy-intensive activities often raise electricity costs for everyone. Even when mining facilities run on renewable energy, opponents claim, they frequently exploit existing clean energy supplies at the expense of ordinary consumers, forcing them to purchase more expensive, and sometimes dirtier, power.
US Crypto-mining Accounts for 40% of the Global Market
Other countries have had similar difficulties with Bitcoin mining. Despite being the world’s largest producer of the application-specific integrated chips used in crypto-mining, China declared all virtual currency activities illegal in the fall of 2021, citing the mining’s “high carbon emissions” as one of the reasons (the central bank of the country also plans to create its own digital currency.) Landsvirkjun, Iceland’s national power utility, which once drew cryptocurrency miners with its environmentally favorable geothermal energy, began refusing new miners power in late 2021. Even Iran, where the lack of oversight of peer-to-peer (P2P) currency allowed entrepreneurs to avoid international sanctions, found crypto-mining to be so burdensome to its grid that the government was forced to ban it — first for four months starting in May 2021, then again in December 2021, as heating demands strained the country’s electricity supply.
The elected officials of Texas, who have welcomed the business with effervescent enthusiasm, have not been deterred by energy usage, water scarcity, or Bitcoin’s volatility. Governor Greg Abbott tweeted this summer after signing a bill recognizing Bitcoin in the state’s commercial code into law, “Blockchain is a flourishing enterprise Texas needs to be involved in.” (Texas was the second state to do so, after Wyoming.) And the miners have arrived, enthralled by the state’s vast open areas, where the rattling fans that keep their hard-working rigs cool can run without disturbing the neighbors, and abundant inexpensive energy keeps overhead low. Whereas China originally accounted for 75% of the crypto-mining industry, the United States currently accounts for 40% of it, with Texas accounting for a quarter of it.