US Department of Energy to Monitor Cryptocurrency Miners' Energy Consumption
Date: 2024-02-01 Author: Dima Zakharov Categories: BLOCKCHAIN
US Government Examines Energy Usage by Cryptocurrency Miners
The US Department of Energy (DOE) is closely monitoring the energy consumption of cryptocurrency miners in response to the recent spike in Bitcoin prices, which has led to a surge in cryptocurrency mining activities.
Energy Information Administration's (EIA) Preliminary Investigation
On January 31, the US Energy Information Administration (EIA), a statistical agency under the Department of Energy, announced that it would conduct a preliminary investigation to assess the use of electricity by local cryptocurrency mining companies, starting from the following week. Miners are required to provide detailed information about their energy usage.
Public Comments on Cryptocurrency Miners' Energy Usage
Public comments regarding cryptocurrency miners' energy usage will also be collected as part of this investigation.
DOE's Focus on Energy Demand for Cryptocurrency Mining
Joe DeCarolis, the administrator of EIA, emphasized that the investigation would pay special attention to how the demand for energy for cryptocurrency mining is evolving. It aims to identify geographical areas with high growth and quantitatively determine the sources of electricity used to meet the demand for cryptocurrency mining.
US Government's Efforts to Regulate Cryptocurrency Mining
This survey is the latest step taken by the US government to exert control over the cryptocurrency mining industry. The United States has become the world's largest hub for miners seeking to relocate their operations after China banned cryptocurrency mining in 2021.
In congressional hearings in 2022, legislators examined the mining industry for its energy consumption and fossil fuel emissions. In early 2023, Congress called on the Environmental Protection Agency to investigate the impact of cryptocurrency mining.
In 2023, US President Joe Biden also proposed a 30% additional tax on electricity expenses for cryptocurrency miners to "reduce mining activity" in the country.
Record-Breaking Energy Consumption by Bitcoin Miners
In 2023, Bitcoin miners consumed approximately 121.13 terawatt-hours of electricity worldwide, marking a record high since the inception of the Bitcoin network in 2010, according to the Cambridge Bitcoin Electricity Consumption Index.
By comparison, data from the International Energy Agency (IEA) for 2022 shows that the European country Belgium consumed 93.8 terawatt-hours.
It is expected that energy consumption will continue to rise, as the IEA's report from January 25 predicts that cryptocurrency mining will consume 160 terawatt-hours by 2026.
