Caveat: Not everyone agrees with Spygen, the NY Times, and the Democrats’ report. Read the comment below by guv geek, which contradicts the article. Always research yourself. Some efforts are now being made to reduce reliance on fossil fuels for Crypto mining.
Did you know that cryptocurrency is using as much power as Argentina and has the carbon footprint of Greece?
According to Spigen, “Tesla CEO Elon Musk rocked the crypto market in 2021 when he said his company would no longer accept bitcoin for vehicle purchases. His reasoning had to do with a large amount of fossil fuel-generated energy required to mine cryptocurrency.
Musk changed his approach and delivered Tesla Megapack batteries to a Texas bitcoin mining facility in May.
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“Bitcoin, Ethereum, dogecoin raise concerns about the increasing amount of energy needed to mine the coins.
As the crypto markets crashed in 2022, crypto mining continued to consume roughly as much power as Argentina and to have a carbon footprint equivalent to that of Greece, according to a research report titled “Revisiting bitcoin’s carbon footprint,” published in February.
As the energy bill for crypto mining rises, so does the amount of carbon and waste, adding to the growing climate crisis.”
“The Digiconomist’s Bitcoin Energy Consumption Index estimated that one bitcoin transaction takes 1,449 kWh to complete, or the equivalent of approximately 50 days of power for the average US household. ”
WHAT IS CRYPTOCURRENCY MINING
“When bitcoins are traded, computers across the globe race to complete a computation that creates a 64-digit hexadecimal number, or hash, for that bitcoin. This hash goes into a public ledger so anyone can confirm that the transaction for that particular bitcoin happened. The computer that solves the computation first gets a reward of 6.2 bitcoins, or about $134,000 at current prices,” Spigen reports.
“Other cryptocurrencies and NFTs use similar mining technologies, contributing to the overall energy usage.”
The process creates individual blocks added to a blockchain by solving complex mathematical problems. The mining verifies the cryptocurrency transactions and shows proof of work.
This process uses a node run on a device with extremely high processing power called a mining rig or a Bitcoin mining app. As an incentive, miners receive a reward in cryptocurrency for each block added to the chain. This reward is how new coins are generated and put into circulation.
Crypto mining involves several proof systems depending on the type of cryptocurrency. Since the blockchain is decentralized, mining is uniquely different from central banks and the creation of fiat.
The process of mining is energy costly and requires expensive hardware and software.
Read all about it at block geeks.
In any case, it’s using an absurd amount of electricity and causing prices to rise exponentially. It’s making it harder to fight global warming.
According to the New York Times reporting on a Democrat investigation, “seven of the largest Bitcoin mining companies in the United States are set up to use nearly as much electricity as all the homes in Houston.”
“Research has shown that a surge in crypto mining is also significantly raising energy costs for local residents and small businesses, and has added to the strain on the power grid in states like Texas.”
“Earlier this year, congressional Democrats launched an investigation into energy use at the country’s largest crypto mining companies. They asked seven crypto mining companies for data on their operations, and the group’s findings, issued Friday, are based on the companies’ responses.
“That data showed that the seven companies alone had set up to tap as much as 1,045 megawatts of power, or enough electricity to power all the residences in a city the size of Houston, the nation’s fourth-largest city with 2.3 million residents. The companies also said they plan to expand their capacity at an eye-popping rate.”
“Overall, the biggest seven crypto mining companies expected to increase their total mining capacity by at least 2,399 megawatts in the coming years, an increase of nearly 230 percent from current levels, and enough energy to power 1.9 million residences.”
They use fossil fuels, for the most part, even coal.
This is crazy but everything going on lately is crazy.
I mine Crytpo. I won’t go into all the misinformation above because crypto is complicated and most people’s face just gloss over. Yes, the computing power needed is huge, but a lot less than the computing power used by the US Government to spy on us. It is also low when you consider the amount of electricity used by the Fiat Currency banking system around the world. Many of the larger operations have their own power plants and smaller operations are going solar, wind, hydro, and tidal.
The big mining operations are in places like Iceland were there is Geothermal or Washington State where there is abundant and cheap Hydro Power. Cryptomining stops being profitable when electricity cost are over 10 cents a Kilowatt Hour, so it is generally done in areas with an abundance of electricity.
Increasingly smaller operations like mine are going solar. Phase 3 of my solar plan will take my cryptomining off grid. This works because cryptomining is done worldwide. You can operate 6 to 8 hours a day off grid on solar panels with no impact to the grid. As the sun moves around the world, Miners in areas of sunshine can supply computing power to the worldwide pool. Another benefit of this is increased maintenance so part-time crypto computers operate at very high efficiency. Once you reach ROI with a solar powered mining operation, everything is profit because well maintained computing equipment will last at least 10 years. In 2021, profits where so good that the ROI on the computing equipment was as little as 6 months if you were highly computer literate and able to run a proper operation. There is a lot more to cryptomining than just buying computer equipment. An efficient Crypto Hive, requires BIOS level modification of computing equipment.
Much of the hype on electric cost is because of “hobbyist” using a gaming computer and actually operating at a lose. The Old School Financial community hates crypto because it is so decentralized and very hard to manipulate; even by Musk! As the technology grows the systems are becoming even more hardened and totally controlled by free markets instead of Governments. The reason the Communist Chinese Government has outlawed Crypto Currency and will replace it with the Digital Yuan is so every transaction can be monitored by Government. If the US Government put us on the Digital Dollar, the Government could control your life and send you to the poor house with a press of a button if you don’t obey. This is why we must keep Cryptocurrency private and decentralized. Government not having control over currency is a Bureaucrats Worse Nightmare.
Interesting and informative. You paint a clear picture of what’s going on behind closed doors. Why is Tezos and Terra being promoted suddenly?
There are a number of Blockchains (Cryptocurrencies) out there. They have different potentials and in time the Market Place will determine the survivors. At the moment, Crypto is a Commodity like a Stock. We have only scratched the surface of it’s potential. Crypto investing is not for the faint of heart, it’s extremely volatile. It’s also not regulated like Stock Markets which protect the Rich and Institutional investors. Crypto is the Wild West of investments, plenty of money has been made in crypto and plenty has been lost. Winning big is as rare as winning the Lottery. There are no experts in Crypto, so don’t follow the hype! As with any investments; pigs get slaughtered. Do your homework and only invest what you can lose.
It is my understanding the the miners concentrate their activities in the Northwest when hydro power is relatively inexpensive. Is this really affecting power prices for residential customers where power is expensive?