US Energy Agency to Monitor Crypto Miners’ Electricity Use

9 months ago 3

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In a pivotal move, the US Energy Information Administration (EIA) is set to gather data on crypto miners’ electricity use. This action aligns with environmental concerns as the Bitcoin halving approaches.

Starting next week, selected crypto miners must detail their power consumption. This follows a January 26, 2024, directive from the Office of Management and Budget.

Why US EIA Wants to Collect Crypto Miners’ Data

EIA claims the initiative is about data gathering and a public conversation starter. Hence, the agency is opening the floor for public discourse on this pivotal issue, inviting comments on the energy consumption patterns of crypto miners.

Joe DeCarolis, the EIA Administrator, underscored the agency’s commitment to dissecting the energy footprint of crypto mining within US borders.

“We intend to continue to analyze and write about the energy implications of cryptocurrency mining activities in the United States. We will specifically focus on how the energy demand for cryptocurrency mining is evolving, identify geographic areas of high growth, and quantify the sources of electricity used to meet cryptocurrency mining demand,” DeCarolis stated.

The shift of mining operations from China to the US has spiked energy demand in certain American regions. This has raised regulatory eyebrows, with American officials voicing concerns over the surge in energy use.

The timing of this survey coincides with the upcoming Bitcoin halving, an event that will cut mining rewards, doubling the cost of mining each Bitcoin. Miners are now racing to expand their setups. The Bitcoin hash rate and mining difficulties are at all-time highs. This halving event will test miners, pushing them to adapt or exit.

Mining for Bitcoin and similar cryptocurrencies is energy-intensive. It requires powerful computers to solve complex problems verifying blockchain transactions. This process consumes vast amounts of electricity. The competition among miners is fierce as they vie for Bitcoin rewards.

The environmental impact of crypto mining, especially proof-of-work tokens like Bitcoin, has been a hot topic. Critics point out the massive energy use, likening it to the power consumption of entire countries. In response, the mining sector is slowly turning to greener practices.