US Gets Serious About Tracking Crypto Mining Electricity Usage

Table of Contents

• Key Takeaways
• Background
• Shift Towards Renewable Energy
• Final Thoughts

Key Takeaways

In a bid to monitor and regulate the energy consumption of cryptocurrency mining operations, the U.S. Environmental Impact Agency (EIA) has started tracking electricity usage data from 52 crypto mines across the country.

Background

According to the EIA’s recent report, electricity consumption for cryptocurrency mining in the U.S. increased from 0.6% to 2.3% of the nation’s total between 2017 to 2021.

Within this period, the environmental impact of power-hungry proof-of-work (PoW) blockchain-based asset like Bitcoin has drawn regulatory attention due to concerns about increasing pressure on the energy grid.

The EIA is using both top-down estimates from the Cambridge Center for Alternative Finance (CCAF) and bottom-up data collection directly from mining facilities. Together, these efforts aim to monitor and potentially manage the energy consumption of crypto mining operations in the U.S.

Shift Towards Renewable Energy

There has been a wider shift towards renewable energy sources among cryptocurrency miners globally. According to investment firm RR2 Capital, over 54.6% of Bitcoin mining is now powered by renewables. However, within the U.S., only 22.5% of mining operations currently use renewable energy – a significantly lower percentage compared to countries like Iceland and Paraguay that rely almost entirely on green sources.

Final Thoughts

By closely monitoring the electricity usage of crypto mines, the EIA seeks to fulfill a White House directive aimed at better understanding and managing the environmental impact of cryptocurrency mining’s energy demands. Over time, this data could help shape policies that incentivize a faster transition towards renewable energy for crypto networks.

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