NFT BUILDS INC

You have not selected any currencies to display

U.S. Govt. Survey to Gauge Cryptocurrency Mining’s Energy Impact

Crypto The U.S. Department of Energy (DOE) has initiated a six-month mandatory survey, conducted by the Energy Information Administration (EIA), to comprehensively assess the energy consumption of commercial cryptocurrency proof-of-work mining companies across the country. This imperative data collection aims to establish a "baseline snapshot" of the energy usage within the U.S. cryptocurrency mining industry.The
 

U.S. Govt. Survey to Gauge Cryptocurrency Mining Energy Impact
The U.S. Department of Energy (DOE) has initiated a six-month mandatory survey, conducted by the Energy Information Administration (EIA), to comprehensively assess the energy consumption of commercial cryptocurrency proof-of-work mining companies across the country. This imperative data collection aims to establish a “baseline snapshot” of the energy usage within the U.S. cryptocurrency mining industry.

The EIA, having received approval for its “emergency request” in January 2024, is focused on measuring the electricity consumption of local mining firms. The surge in Bitcoin prices, witnessing a 50% increase in the last three months, is considered a driving force behind heightened mining activities in the United States. Joe DeCarolis, the EIA administrator, highlighted the urgency of the survey approval during a period of heightened electricity demand due to a major cold snap, expressing concerns about potential impacts on the electricity system and consumer prices.

A map visualizing the estimated distribution of cryptocurrency mining operations in the United States. Source: EIA

The primary objectives of the survey include quantifying the rate of change in mining activity among firms, identifying electricity sources for U.S. cryptocurrency miners, and pinpointing regions with concentrated mining operations. All commercial cryptocurrency mining facilities in the U.S. utilizing proof-of-work consensus mechanisms are mandated to participate in this comprehensive survey.

The approval from the DOE’s Office of Management and Budget allows the EIA to collect data monthly until July 2024. The survey will also consider self-produced energy by cryptocurrency mining companies, accounting for facilities not affecting the national power grid. The EIA is set to publish a notice in February, inviting public comments and feedback on the cryptocurrency mining facilities survey.

In response to the survey, the EIA has already published a technical analysis report outlining the basics of cryptocurrency mining and providing top-down and bottom-up power consumption estimates for the local mining industry. The report acknowledges the skepticism within the crypto community regarding government surveillance, with concerns raised about potential overreach.

The EIA’s estimates of U.S. crypto mining electricity use involve both top-down and bottom-up approaches. According to the Cambridge Bitcoin Electricity Consumption Index (CBECI), the EIA suggests that the U.S. accounts for a substantial share of global Bitcoin mining, estimating electricity usage ranging from 25 terawatt hours to 91 TWh in 2023, representing 0.6% to 2.3% of national electricity demand.

The bottom-up approach identifies 137 U.S.-based facilities, gathering data for 52 specific operations in 21 states. With facilities mostly concentrated in Texas, Georgia, and New York, the EIA estimates the maximum electricity capacity available to these facilities to be 10,275 MW, with a high-range estimate of electricity usage around 70 TWh.

While the EIA emphasizes the cooperation of cryptocurrency mining operations with grid operator incentives to curtail electricity use during peak demand, some members of the crypto community express skepticism, considering the survey an unnecessary intrusion into their operations. The Texas Blockchain Council, for instance, deems it a “flagrant overreach,” while others argue that the U.S. authorities are attempting to create a detailed registry of miners.

Wasif Shakir

Subscribe to the Markets Outlook newsletter
Weekly newsletter that covers the main factors influencing Bitcoin’s price and the week ahead. Delivered every Monday

Related Post