Bitcoin and some other cryptocurrencies rely on a lot of high-performance computers that do high-level calculations. This is known as “cryptocurrency mining,” and it consumes up to 2% of all electricity in the United States, according to the Energy Information Administration.
Starting this week, that federal agency will begin collecting information from cryptocurrency mining companies about where and how that power is being used, but the cryptocurrency industry is not happy about disclosing this information.
When Colin Reed was mayor of Plattsburgh, New York, a few years ago, the small town had just welcomed some Bitcoin mining operations to the city.
They came up with racks and racks of their own computer servers to take advantage of Plattsburgh's cheap hydroelectric power — at least, it was fairly cheap.
“If we exceed those quotas because bitcoin is in town, we then have to buy more energy in the spot markets, which means everyone's prices go up a little bit,” Reed said.
Reed, who is also a professor of economics at SUNY Plattsburgh, wants more transparency about energy use in industry.
But, he said, “the industry may be unwilling to tell the whole story.”
The industry isn't afraid to collect data, according to Lee Bratcher, president of the Texas Blockchain Council. “We are only interested in the way the data is collected,” he said.
Bratcher says mining companies could be at a competitive disadvantage if the Fed publishes what he calls proprietary information.
He added that the industry is exploring how to respond to the EIA request – including whether to take legal action.
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