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US gov’t says crypto mining used as much electricity as Australia in 2023

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Some have called it the future of finance, but cryptocurrency still relies on mining, much like gold. However, unlike gold, it’s not mined for in dark caverns; crypto mining takes place online. Similar to the gold rush of old, crypto mines are proliferating and using an extraordinary amount of electricity.

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According to the U.S. Energy Information Administration, crypto miners worldwide used as much electricity as all of Australia in 2023, which prompted the U.S. government to collect data about the industry’s energy use in America.

“People have long been warning about the, you know, insane amount of energy that is required to mine Bitcoin,” said Ryan Brown, a crypto correspondent for CNBC.

Cryptocurrency relies on miners to search the internet to find and record crypto transactions by solving complex puzzles. Each puzzle that is solved adds a block to the blockchain.

“If person A is sending bitcoin to person B, that transaction needs to be verified by miners,” Brown said. “Once verified, each part of the blockchain needs to be updated with that transaction. Miners are then rewarded in bitcoin.”

And with cryptocurrency’s popularity on the rise, many miners see a lucrative opportunity. The Cambridge Bitcoin Electricity Consumption Index said that the share of Bitcoin mining in the U.S. from January 2020 to January 2022 jumped from 3.4% to 37.8%.

Concerns about crypto mining energy consumption have been growing for years. According to a New York Times analysis from September, bitcoin mining uses seven times the amount of electricity that all of Google uses in one year.

In the U.S. alone, crypto mining accounts for up to 2.3% of the entire country’s electricity demand. The same as the entire state of Utah or West Virginia.

In an emergency request in January, the U.S. Energy Information Administration received authorization from the White House’s Office of Management and Budget to collect energy use data from commercial crypto mining operations in the U.S.

“We intend to continue to analyze and write about the energy implications of cryptocurrency mining activities in the United States,” said EIA Administrator Joe DeCarolis. “We will specifically focus on how the energy demand for cryptocurrency mining is evolving, identify geographic areas of high growth, and quantify the sources of electricity used to meet cryptocurrency mining demand.”

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[KARAH RUCKER]

SOME CALLING IT THE FUTURE OF FINANCE, DIGITAL CRYPTO CURRENCY, LIKE GOLD, STILL RELIES ON MINING… BUT UNLIKE GOLD IT IS NOT MINED FOR IN DARK CAVERNS.

CRYPTO MINING TAKES PLACE ONLINE. 

AND LIKE THE GOLD RUSH OF OLD, CRYPTO-MINES ARE POPPING UP MORE AND MORE, AND USING AN EXTRAORDINARY AMOUNT OF ELECTRICITY.

ACCORDING TO THE U-S ENERGY INFORMATION ADMINISTRATION, IN 20-23 CRYPTO MINERS AROUND THE WORLD USED AS MUCH ELECTRICITY AS ALL OF AUSTRALIA. 

PROMPTING THE U-S GOVERNMENT TO COLLECT DATA ABOUT THE INDUSTRY’S ENERGY USE IN AMERICA.

RYAN BROWN – CNBC CRYPT CORRESPONDENT: “PEOPLE HAVE LONG BEEN WARNING ABOUT THE, YOU KNOW, INSANE AMOUNT OF ENERGY THAT IS REQUIRED TO MINE BITCOIN.”

[KARAH RUCKER]

CRYPTOCURRENCY RELIES ON MINERS TO SCOUR THE INTERNET TO FIND AND RECORD CRYPTO TRANSACTIONS BY SOLVING HIGHLY COMPLEX PUZZLES.

EACH PUZZLE THAT IS SOLVED ADDS A BLOCK TO WHAT IS CALLED THE BLOCK CHAIN.

RYAN BROWN – CNBC CRYPT CORRESPONDENT: “IF PERSON A IS SENDING BITCOIN TO PERSON B THAT TRANSACTION NEEDS TO BE VERIFIED BY MINERS. ONCE VERIFIED EACH PART OF THE BLOCKCHAIN NEEDS TO BE UPDATED WITH THAT TRANSACTION. MINERS ARE THEN REWARDED IN BITCOIN.”

[KARAH RUCKER]

AND WITH CRYPTOCURRENCY’S POPULARITY ON THE RISE, MANY MINERS SEE A LUCRATIVE OPPORTUNITY.

THE CAMBRIDGE BITCOIN ELECTRICITY CONSUMPTION INDEX SAYS THE SHARE OF BITCOIN MINING IN THE U-S JUMPED FROM 3-POINT-4 PERCENT IN JANUARY 20-20 TO 37-POINT-8 PERCENT IN JANUARY 20-22.

CONCERNS ABOUT CRYPTOMININGS ENERGY CONSUMPTION HAVE BEEN GROWING FOR YEARS. ACCORDING TO THE NEW YORK TIMES, BITCOIN MINING USES 7-TIMES THE AMOUNT OF ELECTRICITY THAT ALL OF GOOGLE USES IN ONE YEAR.

IN THE U.S. ALONE, CRYPTO MINING ACCOUNTS FOR UP TO 2-POINT3-PERCENT OF THE ENTIRE COUNTRY’S ELECTRICITY DEMAND. THE SAME AS THE ENTIRE STATE OF UTAH OR WEST VIRGINIA.

THE WHITE HOUSE AUTHORIZED AN EMERGENCY DATA REQUEST TO ALLOW  THE U-S ENERGY INFORMATION ADMINISTRATION REQUIRE CERTAIN CRYPTO MINERS TO HAND OVER DETAILS OF THEIR ENERGY USE.

EIA ADMINISTRATOR Joe DeCarolis SAYING

QUOTE: 

“We will specifically focus on how the energy demand for cryptocurrency mining is evolving, identify geographic areas of high growth, and quantify the sources of electricity used to meet cryptocurrency mining demand.”