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The U.S. government has announced a new initiative to keep tabs on the energy consumption of cryptocurrency mining operations.
The Energy Information Administration (EIA) will soon embark on a target="_blank" rel="noreferrer noopener">gather comprehensive details regarding their energy usage.
Starting next week, this exercise aims to highlight the evolving energy patterns related to crypto mining, pinpoint areas of concentrated growth, and shed light on the energy sources underpinning this digital asset creation.
Authorized under an urgent data collection directive by the White House Office of Management and Budget, this initiative stems from heightened attention to the environmental impacts of crypto mining.
Joe DeCarolis, the EIA Administrator, emphasized the significance of this inquiry, stating that understanding how the energy demand for cryptocurrency mining is changing and identifying regions with rapid expansion will be amongst the agency’s key focuses.
This surge in electricity usage for mining purposes, primarily for Bitcoin (BTC), falls against the backdrop of a dynamic industry that frequently migrates to chase lower power costs and legislative havens.
These nomadic tendencies are complicating the efforts of grid planners to keep up while also sparking a conversation around mandated disclosures on emissions and energy consumption.
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Bitcoin’s energy-intensive proof-of-work mining process has been contrasted with the more energy-conservative proof-of-stake methods adopted by other cryptocurrencies like Ethereum (ETH).
According to the EIA, the rapid upsurge of cryptocurrency mining in the U.S. is now gobbling up a staggering 0.6% to 2.3% of the nation’s electricity consumption. Preliminary assessments by the agency liken the energy draw of crypto mining to the total power consumption of entire states, such as Utah and West Virginia.
The crypto mining industry, which took off around a decade ago, has been booming, especially after operations shifted from China to the U.S. following the Asian giant’s crypto crackdown.
The ripple effects of this energy-intensive endeavor have raised worries over potential strains on U.S. power infrastructure, possible spikes in electricity pricing, and an uptick in carbon emissions that exacerbate climate change.
According to the Wall Street Journal, there have even been instances where dormant fossil fuel plants were resurrected to satisfy the surging power demands of crypto-mining hubs.
This trend has prompted Democratic legislators to vocalize their concerns and call upon federal authorities to monitor and mitigate these energy and environmental impacts closely.
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