Are you curious about how much electricity cryptocurrency mining consumes in the U.S.? Do you want to know how the U.S. Energy Information Administration (EIA) plans to track and measure crypto mining power use? If yes, then you are in the right place. In this article, you will learn about the EIA’s initiative to monitor the electricity use of cryptocurrency mining firms in the country and why it is essential for the environment and the economy.
You will also find out what questions the EIA will ask the miners and what insights the survey will provide. This article is based on a recent Reuters news report with SEO-friendly content tips. Read on to discover more about crypto mining power and its impacts.
Crypto mining power use: EIA to survey Bitcoin miners on electricity consumption
The U.S. Energy Information Administration (EIA), the agency that collects and analyzes data on various aspects of U.S. energy production and consumption, announced on Wednesday that it will start tracking the electricity use of cryptocurrency mining firms in the country more closely.
The EIA said it will launch a survey of some Bitcoin miners next week, asking them to provide details on their energy consumption. This is part of an urgent data collection request approved by the Office of Management and Budget on Jan. 26.
The EIA’s decision to monitor crypto mining power comes amid growing concerns about the industry’s environmental and economic impacts, which have surged in popularity and profitability in recent years. Bitcoin, the most widely used cryptocurrency, relies on a network of computers called miners to verify transactions and create new coins. This process requires a lot of computing power and electricity, which can strain the power grid and contribute to greenhouse gas emissions.
According to a study by the University of Cambridge, the annual electricity consumption of the global Bitcoin network was estimated to be 127 terawatt-hours (TWh) in February 2024, which is more than the entire electricity consumption of Norway and equivalent to the carbon footprint of Argentina. ¹
According to the Cambridge study, the EIA wants to measure crypto mining power use in the U.S., which is estimated to account for about 7% of global bitcoin mining. The EIA also intends to compare crypto mining’s energy use with that of other sectors, such as data centres and manufacturing, and understand how it affects electricity prices and reliability in different regions.
Crypto mining power use: Cryptocurrency mining under scrutiny for environmental impact
Cryptocurrency miners, who use powerful computers to generate new digital coins, have faced criticism recently for their high electricity demand and impact on the environment and the power grid.
The EIA’s survey will aim to understand how the power demand for cryptocurrency mining is evolving and to identify the regions and the energy sources where the mining activity is growing.
The EIA’s survey will cover both large-scale and small-scale miners, who may operate in different settings and use different types of equipment. Large-scale miners typically run specialized hardware, called application-specific integrated circuits (ASICs), in dedicated facilities with access to cheap and abundant electricity, such as hydroelectric dams or natural gas plants. On the other hand, small-scale miners may use general-purpose computers, such as laptops or desktops, in their homes or offices and rely on the local grid or renewable sources, such as solar panels or batteries.
The EIA’s survey will also explore the factors influencing the miners’ location and profitability, such as electricity costs, climate, regulations, incentives, and competition. For example, some states, such as Texas and Wyoming, have attracted miners with their low electricity prices, favourable tax policies, and supportive legislation. ²³ Some miners have also moved to colder regions, such as Alaska or Canada, to reduce the cooling costs of their equipment. ⁴
Crypto mining power use: Questions to be asked to the miners
Some of the questions that the EIA plans to ask the miners are:
– How much electricity do you use for cryptocurrency mining?
– What are the types and capacities of the equipment you use for mining?
– Where are your mining facilities located?
– What are the sources and costs of the electricity you use for mining?
– How do you manage the heat generated by your mining equipment?
The EIA hopes to obtain a representative sample of the cryptocurrency mining industry in the U.S. and collect accurate and reliable data from the miners. To this end, the EIA will use a web-based questionnaire sent to the selected miners via email. The miners must respond within 30 days and provide their energy use data for January 2024. The EIA will also verify the data by cross-checking with other sources, such as the electricity providers, the regulators, and the industry associations.
The EIA expects to publish the survey results by the end of 2024 and update them annually. The EIA will also use the data to improve its forecasts and analyses of the U.S. energy sector. It will also inform policymakers and the public about crypto mining power use and its implications.
Crypto mining power use: EIA hopes to get a representative sample of the industry
According to the Cambridge study, the EIA hopes to get a representative sample of the cryptocurrency mining industry in the U.S., which is estimated to account for about 7% of global bitcoin mining. The EIA also wants to compare the energy use of cryptocurrency mining with other sectors, such as data centres and manufacturing, and to understand how it affects electricity prices and reliability in different regions.
The EIA’s initiative is part of a broader effort to measure the environmental and economic impacts of cryptocurrency mining, which has become a booming industry in recent years. According to a report by the University of Cambridge, bitcoin’s global electricity consumption is 127 terawatt-hours (TWh) per year, which is more than what the whole country of Norway uses.
The EIA’s survey will also provide valuable insights into the trends and challenges of the crypto-mining industry, which is constantly evolving and innovating. For instance, some miners have adopted more energy-efficient technologies, such as liquid cooling or immersion cooling, to reduce their power consumption and heat generation. Some miners have also switched to other cryptocurrencies, such as Ethereum or Dogecoin, which may have different mining algorithms and energy requirements. Some miners have joined forces with other miners, forming pools or cooperatives to share the resources and the rewards.
Crypto mining power use: EIA expects to have more information in a few months
The EIA’s Glenn McGrath, who leads the survey project, told Reuters: “It is a significant source of demand that we think is worth our efforts to measure. But we also have more questions than answers until we get better data to verify the activity.”
McGrath said the EIA, which covers a wide range of U.S. energy topics, has received requests from different sectors to measure the energy use of cryptocurrency mining and expects to have more information to share in a few months.
The EIA’s survey is one of the first attempts to quantify crypto mining power use in the U.S. and to fill the gap in the existing data and research. The EIA hopes that the survey will help improve understanding and awareness of the crypto mining industry and its impacts and support the energy sector’s and society’s decision-making.