As Crypto Floods Texas, High Power Consumption Grabs Congressional Attention

[ad_1]

WASHINGTON — By design, exactly 900 bitcoins are mined every day — a number that decreases every four years until there are no more bitcoins left to find.

The job of extracting the dwindling reserve falls to powerful computers, which plug in number after number until they find the correct 64-digit sequence. Beating other miners doing the exact same thing requires not only ever faster fleets of computers, but massive amounts of energy to run them.

From wind farms in West Texas to a former coal plant outside Austin, crypto miners are flocking to Texas, taking advantage of one of the cheapest energies in the country and positioning the state to become the state’s crypto mining leader. But the accompanying spike in energy use is grabbing the attention of Congress as the world tries to not only clean up its energy system, but also reduce demand to fight climate change.

In a hearing this month before the House Energy and Commerce Committee, Speaker. Representative Frank Pallone, DN.J., questioned the sustainability of the crypto mining business model.

One estimate revealed that the energy needed to process (one) transaction on the bitcoin network could power a home for more than 70 days, Pallone said. Last year, there were hundreds of thousands of transactions on this network. Imagine the climate implications.

A recent study by scientists at the University of Cambridge found that crypto-mining operations worldwide consume 135 terawatt hours of electricity per year, more than the entire country of Argentina.

The majority of that electricity comes from hydroelectric dams and coal and natural gas power plants, the scientists found. In Texas, for example, crypto-mining company Riot Blockchain operates out of a former aluminum processing site in Rockdale that runs on its own coal-fired power plant.

Defenders of the US cryptocurrency industry say they are being unfairly targeted, pointing out that most industries still rely on fossil fuels – a necessity on a power grid that remains dependent on coal and natural gas.

If you compare that to what gold spends on energy consumption, or banks and all that infrastructure, it wasn’t that bad, said Howard Greenberg, president of the American Blockchain and Cryptocurrency Association. We use the same amount of energy as Christmas lights, and I never hear anyone complain about it.

In Texas, so far, crypto miners are welcomed with open arms. The Texas Legislature last year passed a bill creating a task force to help develop the cryptocurrency industry in Texas, with Governor Greg Abbott writing on Twitter, It’s happening. Texas will be the leader in crypto.

This, along with cheap state electricity prices, is attracting crypto mining businesses from around the world, most of which were forced to seek new homes after the Chinese government banned the cryptocurrency. last year.

Chicago-based EZ Blockchain has proposed setting up mobile computing rigs in Texas oil and gas fields, powering their mining operations with natural gas that would otherwise be flared.

Las Vegas-based Marathon Digital announced last month that it was installing more than 100,000 Bitcoin mining computers across Texas, mostly next to wind and solar farms in West Texas.

This industry has transformed over the past year since China shut down mining, said Charlie Schumacher, director of corporate communications at Marathon. The United States is unique because we have excess power here and we have a supportive regulatory environment. But we went through this transition so quickly that it raised a lot of questions.

Even though some crypto companies are making strides in using clean energy for their operations and reducing their energy consumption by using more efficient equipment, the sheer scale of their energy demand makes many think.

And as new miners flood the industry, there are few signs of slowing down. According to Cambridge scientists, electricity consumption to mine bitcoin, the most popular cryptocurrency, has nearly doubled in the past two years.

We were making all these great strides to decarbonize and reduce our energy consumption and we were now promoting this incredibly energy-intensive new industry and wiping out all the climate gains that we were struggling to achieve, said Luke Metzger, executive director of Environment Texas, an activist group. This seems very unnecessary and not what we need right now.

How much power crypto will need in the future is anyone’s guess. Miners only mine when it is profitable to do so, and with a single Bitcoin currently selling for over $37,000, the incentives are high. But if bitcoin prices crash – as they did in November – then miners would have to reassess.

At some point, it’s not economical, Schumacher said. The majority of bitcoins that will ever exist are already in circulation. Were all going after the last two million.

According to the bitcoin algorithm, the last coin should be mined in 2140, he said.

[email protected]

[ad_2]