The energy demands of crypto mining in the United States have seen a significant increase over the past four years, according to a press release from the Environmental Impact Agency (EIA). The EIA has been tasked by the White House to assess the energy consumption of the crypto ecosystem.
In its report, the EIA revealed that annual electricity use for crypto mining has risen from 0.6% to 2.3%. As a result, the agency has committed to monitoring and controlling the energy consumption associated with mining activities.
Mapping the U.S. Crypto Mining Operations
The EIA has identified 52 crypto-mining operations across the US crypto ecosystem so far. These operations have been categorized based on their megawatts per hour (MWh) use. The data shows that 32 commercial miners use between 0 and 50 MWh, nine miners use 51 to 100 MWh, and five facilities use 101 to 200 MWh.
Further details reveal that five miners use 201 to 500 MWh, while only one mining facility uses 500 MWh and above in the country.
The increased energy consumption in Bitcoin mining has caught the attention of policymakers and grid planners, prompting regulatory intervention. Stakeholders are concerned about the effects, costs, reliability, and emissions of resource-intensive digital assets like Bitcoin. To gather data on electricity use, the EIA is using a top-down approach by collaborating with the Cambridge Center for Alternative Finance (CCAF) and a bottom-up approach by contacting operational mining operations.
Shift in Focus Toward Renewable Energy
Crypto mining operations gained prominence in 2019 after Bitcoin’s surge to $20,000. China led global mining with 50% of Bitcoin assets created in the region. However, government crackdowns have shifted mining operations to the US.
While Bitcoin transactions require a large amount of energy, the blockchain protocol’s energy use has been transitioning. According to RR2 Capital, over half of global Bitcoin mining operations are powered by renewable energy sources. In the US, 22.5% of mining operations use renewable energy.
However, Iceland operates on 100% renewable energy, and Paraguay relies on 99.8% renewable sources.
Hot Take: EIA Investigates Crypto Mining’s Energy Use
The Environmental Impact Agency (EIA) in the United States has initiated an investigation into the energy consumption of crypto mining activities following directives from the White House. The EIA’s report reveals a significant increase in annual electricity use for crypto mining, prompting concerns from policymakers and grid planners. The agency is committed to monitoring and controlling this energy consumption. With 52 crypto-mining operations identified across the US, the EIA is using a top-down approach with the Cambridge Center for Alternative Finance (CCAF) and a bottom-up approach by contacting operational mining operations to gather data on electricity use. Additionally, there is a growing focus on using renewable energy sources for crypto mining, with over half of global Bitcoin mining operations powered by renewables.
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