It's well known that bitcoin mining uses an enormous amount of electricity, but what does that look like on the ground? In this article, The New York Times, "using both public and confidential records as well as the results of studies it commissioned," puts together "the most comprehensive estimates to date" on the scale of bitcoin mining in the U.S. and the real-world impact of bitcoin's massive electricity consumption.
"Texas was gasping for electricity. Winter Storm Uri had knocked out power plants across the state, leaving tens of thousands of homes in icy darkness. By the end of Feb. 14, 2021, nearly 40 people had died, some from the freezing cold. Meanwhile, in the husk of a onetime aluminum smelting plant an hour outside of Austin, row upon row of computers were using enough electricity to power about 6,500 homes as they raced to earn Bitcoin, the world’s largest cryptocurrency. ... In Texas, the computers kept running until just after midnight. Then the state’s power grid operator ordered them shut off, under an agreement that allowed it to do so if the system was about to fail. In return, it began paying the Bitcoin company, Bitdeer, an average of $175,000 an hour to keep the computers offline. Over the next four days, Bitdeer would make more than $18 million for not operating, from fees ultimately paid by Texans who had endured the storm. ... Each of the 34 operations The Times identified uses at least 30,000 times as much power as the average U.S. home. ... It is as if another New York City’s worth of residences were now drawing on the nation’s power supply, The Times found. ... In Texas, where 10 of the 34 mines are connected to the state’s grid, the increased demand has caused electric bills for power customers to rise nearly 5 percent, or $1.8 billion per year, according to a simulation performed for The Times by the energy research and consulting firm Wood Mackenzie. ... “Ironically, when people are paying the most for their power, or losing it altogether, the miners are making money selling energy back to Texans at rates 100 times what they paid,” said Ed Hirs, who teaches energy economics at the University of Houston and has been critical of the industry." ... Of course, other industries, including metals and plastics manufacturing, also require large amounts of electricity, causing pollution and raising power prices. But Bitcoin mines bring significantly fewer jobs, often employing only a few dozen people once construction is complete, and spur less local economic development. ... The [Applied Digital bitcoin] mine [in Jamestown, ND] has 33 employees and uses nearly 10 times as much electricity as all the homes in the 16,000-person town. It is one of three mines in the state that together consume nearly as much power as every home in North Dakota."
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