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Bitcoin Pollution

No matter how much you know about cryptocurrencies, you may be surprised that environmentalists are adamantly opposed to these banking alternatives. That is because many, but not all, cryptocurrencies consume massive amounts of energy. The New York Times recently reported that seven of the largest Bitcoin mining companies in the US use nearly as much electricity as all of the homes in the city of Houston. Houston is the fourth most populous city in the United States. The reason that Bitcoin miners use so much electricity is that they use powerful computers to create and track the currency’s units. This explanation is over-simplified, but “mining” a currency means that computers solve incredibly complex mathematical formulas in order to add units of the Bitcoin currency to the market. These computers are so energy-intensive that China banned the mining of cryptocurrencies in 2021.

What is worrisome to anybody who cares about the environment is that the mining practice is causing a massive increase in carbon emissions across the world. As of May, experts estimated that Bitcoin consumes an estimated 150 terawatt-hours of electricity per year, more than the 45-million-person population of Argentina. These impacts are not only felt on the global level, but they harm local communities as well. Take the example of Texas; its power grid has failed a few times recently due to its inability to keep up with consumer demand in both winter and summertime. Although there are many causes for this failure, some argue that crypto mining is pushing the Texas power grid over its limit.

Grime, but no crime

Perhaps the most worrisome aspect of the entire ordeal is that Bitcoin mining companies are increasing their capacity, and, therefore, their energy consumption, at a highly alarming rate. The data about the seven largest US companies consuming as much as the city of Houston came from a congressional inquiry into Bitcoin energy consumption. Congress asked the seven largest companies for their company data, including, energy use, and these figures were used to compile evidence and guide future policy. Each company reported their consumption, and each and every one of them also reported that they were planning to expand rapidly. For example, Marathon Digital Holdings reported that it operated 33,000 mining rigs as of February. This number rose from 2,000 at the start of 2021. By early 2023, it expects to have over 199,000 mining rigs up and running. This company gets its energy from the dirtiest source, a coal plant in Montana. Although the company announced that it would be moving its operations to locations with more sustainable sources of power to move towards carbon neutrality, it did not provide any details about where these locations would be.

In total, the seven largest cryptomining companies in the US expect to increase their capacities by 230 per cent in the near future. Miners are betting on the US because of China’s 2021 crackdown, and the United States now makes up 37 per cent of computing power used for cryptomining. Currently, these companies are obeying the law, but it has become clear that local and federal governments need to put protections in place, so ordinary consumers are not bearing the brunt of what is ultimately a useless, power-intensive cash grab.