A study commissioned by The New York Times has revealed just how much energy Bitcoin mining uses, and the results will shock you.
Bitcoin miners use powerful computers to solve complex mathematical equations, which verify transactions on the blockchain. The first miner to solve the equation and add a new block to the blockchain is rewarded with newly created bitcoins.
The difficulty of the mathematical equations is adjusted regularly to ensure that new blocks are added to the blockchain at a steady rate. As more miners join the network, the difficulty increases, making it more challenging to mine bitcoins.
The New York Times states that until June 2021, most Bitcoin mining was in China, but operations were driven out for some time with energy use being cited as one of the big reasons.
Until then, just how much energy the process uses has been largely unclear. But with new data, thanks to The Times, we can now see just how much potential environmental and economical damage this huge scale money maker is causing.
Crypto And The Energy Crisis
The US is now a global leader in Bitcoin mining and there are big concerns about the environmental damage these massive operations are causing. Some mines use almost the same amount of energy as the thousands of houses around them, The Times found.
“[And] Riot Platforms’ mine in Rockdale, Texas, uses about the same amount of electricity as the nearest 300,000 homes, making it the most power-intensive Bitcoin mining operation in America.” A fact the study discovered.
Bitcoin mining in the US is such a massive operation that it was found that the amount of pollution it causes is equivalent to that of 3.5 million cars.
This data comes right after the nonprofit Environmental Working Group released its paper on the high energy costs of Bitcoin mining.
Due to the number of miners on the Blockchain, Bitcoin mining has become a very competitive business. With more people mining, more computers are necessary. In some cases, tens of thousands of computers are used resulting in more fossil fuels being burned.
Rising Energy Prices For The Average Home Owner
In the report, The Times found that some Bitcoin mining operations are making massive amounts of money during environmental disasters such as floods and storms when members of the public are going through extreme challenges.
The report says “In some states, notably New York, Pennsylvania, and Texas, Bitcoin operators’ revenue can ultimately come from other power customers.”
In Texas, it states, Bitcoin companies are paid by the grid for promising the shutdown of their operations to prevent blackouts in emergencies. In reality, the report found this rarely happens and instead, Bitcoin mining companies pocket additional revenue while continuing their day-to-day business; mining Bitcoin.
The Times investigated records that found five operations have collectively made at least $60 million from the program since 2020.
The crypto industry continues to push back on the data being uncovered, but with facts like those The Times has reported, it’s hard to ignore just how damaging Bitcoin mining has become.