Six of the biggest US crypto mining companies already use as much electricity as all the homes in the city of Houston. Over the next three years, these companies plan to triple their electricity consumption, until they absorb enough energy to power all the homes in the cities of Houston, Los Angeles, and Miami.
Crypto miners use energy-hungry computers to solve difficult math problems as part of the process of minting cryptocurrencies like bitcoin and ethereum. US Congress members began investigating the biggest mining companies’ electricity consumption last year, and revealed their energy use and expansion plans in a July 15 letter (pdf) to the US Environmental Protection Agency. “The results of our investigation, which gathered data from just seven companies, are disturbing, with this limited data alone revealing that crypto miners are large energy users that account for a significant—and rapidly growing—amount of carbon emissions,” the investigators wrote.
Crypto mining is not solely responsible for the US’s slow action on climate change, nor is it one of the industries most responsible for US carbon emissions. But it is an electricity-intensive industry that is growing quickly and has grand aspirations to replace the global financial system—which would surely involve scaling up much more and using much more power.
In their responses to congressional investigators’ inquiries, the mining companies point out that cryptocurrencies like bitcoin account for less than 1% of global electricity demand. Some, like Riot Blockchain, emphasized that some of their facilities use 100% renewable energy (pdf). Others, like Greenidge, argue their operations are carbon-neutral because they purchase carbon offsets (pdf). Stronghold Digital Mining made the argument that its coal-burning power generator helps the environment by eliminating hazardous piles of discarded coal left over from abandoned mines (pdf).
But the congressional investigators weren’t impressed by the miners’ climate efforts. “[T]hese and similar promises about clean energy use obscure a simple fact,” they wrote in their letter to the EPA. “Bitcoin miners are using huge quantities of electricity that could be used for other priority end uses that contribute to our electrification and climate goals, such as replacing home furnaces with heat pumps.”
Adding gigawatts of extra electricity demand to the power grid will, inevitably, slow down the US transition from fossil fuels to renewable energy. The country is already behind on US president Joe Biden’s goal of building a carbon-neutral power grid by 2035—and it’s racing to build wind turbines, solar panels, high-power transmission lines, and battery storage facilities to replace coal and natural gas burning power plants as soon as possible. Every gigawatt of renewable power that must be diverted to power new crypto mining capacity is a gigawatt that isn’t going toward replacing coal- and gas-fired power plants.
Six of the seven biggest US crypto mining companies gave congressional investigators data about their current electricity use and plans for future expansion. (One company, Bitfury, responded to the congressional inquiry but didn’t offer hard numbers about its energy consumption.) These companies plan to build hundreds of thousands of new mining rigs—computers specialized for crypto mining—by 2025. The new rigs they add in the next three years will consume at least 2.4 additional gigawatts of electricity.
The 2.4 gigawatts of power the planned mining rigs will consume is equal to about 1.3% of the 186.8 gigawatts of planned wind and solar power generation slated to be built in the US by 2025.
With 2.4 gigawatts of renewable electricity capacity, you could:
🏠 power 1.9 million US homes emissions-free, or
Or, of course, you could:
⛏️ mine about 150,000 bitcoin per year, worth $3.4 billion at current prices.
The crypto mining industry is already having a small but appreciable impact on the US energy transition. As it continues to grow, its climate impact will only get bigger.