The United States is taking steps to better understand the energy impact of cryptominers on its territory. The Energy Information Administration (EIA), linked to the US Department of Energy, announced that it will begin a detailed survey of the electricity consumption of identified cryptocurrency mining companies in the country starting next week. This action follows authorization from the Office of Management and Budget, granted on January 26. Thus, becoming an emergency data collection request valid for six months.
This innovative move by the US highlights growing concern about the energy implications of cryptomining activities. Especially at a time when the price of Bitcoin has shown a significant increase. The EIA justifies this emergency measure by citing the approximately 50% jump in the value of Bitcoin in the last three months. Thus, encouraging greater mining activity and, consequently, an increase in electricity consumption.
Joe DeCarolis, EIA administrator, expressed the agency’s commitment to analyzing and publicizing the energy consequences of these activities. The research will focus on how energy demand for cryptocurrency mining is evolving. It will also identify areas of high geographic growth and quantify the electricity sources used to meet this demand.
Rising bitcoin price accelerates demand for energy in mining
The EIA also plans to solicit public comments on energy use by U.S. cryptominers. Thus, signaling an effort to engage the community and relevant stakeholders in the discussion about sustainable mining practices.
The concern is not unfounded, given that the central United States recently faced a severe cold snap, resulting in elevated demand for electricity. The conjunction of increased cryptocurrency mining with electrical systems already under pressure could lead to spikes in demand that affect system operation and electricity prices for consumers.
However, not everyone agrees with the urgency of this data collection. Pierre Rochard, vice president of research at bitcoin mining company Riot Platforms, argued that bitcoin actually stabilizes the electrical grid through demand response, suggesting that there is no “emergency” that justifies this action.
After all, the issue of energy consumption by cryptocurrency mining remains complex. This is evidenced by the recent reduction of operations by miners in Texas in response to requests from the state’s grid regulator during the cold snap. This action illustrates the potential for a more harmonized approach between cryptocurrency mining and energy demand management.
The views and opinions expressed by the author, or anyone mentioned in this article, are for informational purposes only and do not constitute financial, investment or other advice. Investing in or trading cryptocurrencies carries a risk of financial loss.