Crypto miners aren't honest about power use – time for a crackdown
(2022/07/18)
- Reference: 1658158205
- News link: https://www.theregister.co.uk/2022/07/18/cryptominers_us_crackdown/
- Source link:
Cryptocurrency miners can't be trusted to give honest information about the power they use so a group of Senators and Representatives want the federal government to compel them to be transparent.
In a [1]letter [PDF] sent to Environmental Protection Agency (EPA) administrator Michael Regan and Department of Energy (DoE) secretary Jennifer Granholm, six Democrat members of Congress said that cryptocurrency mining is so unregulated it's practically impossible to get an accurate tally of the energy and emissions costs of mining for Bitcoin, Ethereum, and "altcoins."
"It is imperative that your agencies work together to address the lack of information about cryptomining's energy use and environmental impacts," the writers urged.
Here are the (partial) receipts
To make their case, Senators Elizabeth Warren (D-MA), Sheldon Whitehouse (D-RI), Ed Markey (D-MA), and Jeff Merkley (D-OR), along with representatives Jared Huffman (D-CA), and Rashida Tlaib (D-MI), say there's no need to look beyond the industry itself.
The sextet said they reached out to seven of the largest cryptomining companies in the US to get information about their facilities, energy sources, consumption, and climate impact of their operations. The group contacted Riot, Bit Digital, Bit Deer, Stronghold, Marathon, Greenidge, and Bitfury.
[2]
"None of the companies provided full and complete information in response to our questions. But the information they did provide reveals that these companies' mining operations are significant and growing, have a major impact on climate change, and that federal intervention is necessary," the representatives said.
[3]
[4]
The most notably obfuscated reply came from Riot, and led the letter writers to question self-reported sustainability metrics. According to the letter to the EPA and DoE, Riot told the representatives that its Coinmint facility in Oklahoma ran almost entirely on hydroelectricity.
"But its Whinstone facility, which is seven times larger, uses power from the Texas grid that relies on coal or natural gas for more than 63 percent of its generating capacity," the representatives wrote. The letter noted that the Crypto Climate Accord, cited by Bit Digital as proof it was taking steps toward decarbonization, is nonbinding.
[5]
Based on self-reported numbers, those seven cryptomining companies plan to scale up by 230 percent in the next few years, which would require enough energy to power more than 1.9 million homes. Los Angeles, the letter points out, has 1.4 million households.
Everything is bigger in Texas
Since 2019, when the US was only mining around 4 percent of the Bitcoin in the world, mining bans in China and elsewhere pushed the [6]total US share to [7]nearly 40 percent in May 2022. That makes the US the largest Bitcoin miner in the world.
This has driven up energy bills in some cities, like Plattsburgh, NY, where the letter said residential power bills were $300 higher than usual thanks to cryptomining. Plattsburgh became the first city in the US to issue a [8]moratorium on new mining operations , which has since been lifted.
[9]India's Internet Association ends crypto advocacy to do something more productive
[10]Crypto lender Celsius in Chapter 11 deep freeze
[11]Global financial stability regulator signals crypto rules are coming soon
[12]Now-frozen crypto-lending biz Celsius accused of devolving into a Ponzi scheme
Cryptomining is also experiencing a surge in Texas, the letter notes, where the state electrical grid is [13]already taxed and considered [14]unstable due to its isolation from regional power grids. During a recent heatwave, cryptomining companies in Texas were urged to cut power to their facilities to ease electrical stress, which most reportedly did. While that helped, it wasn't a solution, University of Texas Austin and Webb Energy Group research associate Joshua D Rhodes [15]told the Texas Tribune .
"I don't think [miners shutting down] single-handedly saved [the grid]. It was part of a suite of actions across energy consumers that helped keep the grid stable," Rhodes said.
Aren't crypto prices and energy use down?
Since [16]cryptocurrencies crashed in June, there has been an unsurprising drop in energy used to mine digital currencies – [17]as much as 50 percent in the case of Bitcoin.
Prior to the crash, the Bitcoin network was using approximately 204.5 TWh of power per year. Most recently, Digiconomist has pegged [18]Bitcoin's consumption at 132.84 TWh/year. While a significant drop, that's still the same amount of energy used annually by Argentina, and the same carbon footprint as Columbia.
Cryptocurrency defenders have previously [19]tried to absolve themselves of responsibility for emissions from their operations by arguing that pollutants are emitted not by them, but by power plants they don't control. The rebuttals from cryptocurrency industry leaders were directed at a May letter from Rep Huffman and other congressional Democrats, who were asking the EPA to investigate the energy costs of cryptocurrency mining.
It appears not much has changed in the intervening months. Huffman is a signee on the latest letter, which extends the argument that cryptomining is a waste of energy – even clean energy – beyond saying miners shouldn't be absolved of the greenhouse gasses their operations indirectly create.
[20]
"Miners are using huge quantities of electricity that could be used for other priority end uses that contribute to our electrification and climate goals," the letter said. The sextet of representatives asked for the DoE and EPA to provide it with plans on how it intended to enforce reporting from cryptocurrency miners by August 15, at which time Congress will be in recess. ®
Get our [21]Tech Resources
[1] https://www.warren.senate.gov/imo/media/doc/2022.07.15%20Letter%20to%20EPA%20and%20DOE%20Re%20Cryptomining%20Environmental%20Impacts.pdf
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2YtWDpmVZdIinf3EF8HR1KQAAAE0&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
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[6] https://www.theregister.com/2022/05/19/despite_ban_china_surges_back/
[7] https://ccaf.io/cbeci/mining_map
[8] https://www.coindesk.com/layer2/miningweek/2022/03/21/after-short-lived-ban-ny-town-is-still-reckoning-with-crypto-miners-next-door/
[9] https://www.theregister.com/2022/07/18/indias_internet_association_quits_cryptoboosting/
[10] https://www.theregister.com/2022/07/14/frozen_cryptocurrency_lending_biz_celsius/
[11] https://www.theregister.com/2022/07/12/fsb_crypto_regulation_soon/
[12] https://www.theregister.com/2022/07/08/frozen_cryptocurrency_lending_biz_celsius/
[13] https://www.theregister.com/2021/02/17/texas_blackouts_semiconductor_fabs/
[14] https://texasscorecard.com/state/study-unreliable-energy-is-destabilizing-texas-power-grid/
[15] https://www.texastribune.org/2022/07/15/crypto-energy-texas-power-grid/
[16] https://www.theregister.com/2022/06/13/celsius_freeze_wipes_out_18/
[17] https://www.theguardian.com/technology/2022/jun/24/electricity-consumption-mine-bitcoin-plummets-crypto-crisis-widens-cryptocurrency
[18] https://digiconomist.net/bitcoin-energy-consumption
[19] https://www.theregister.com/2022/05/03/crypto_mining_environment/
[20] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33YtWDpmVZdIinf3EF8HR1KQAAAE0&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[21] https://whitepapers.theregister.com/
In a [1]letter [PDF] sent to Environmental Protection Agency (EPA) administrator Michael Regan and Department of Energy (DoE) secretary Jennifer Granholm, six Democrat members of Congress said that cryptocurrency mining is so unregulated it's practically impossible to get an accurate tally of the energy and emissions costs of mining for Bitcoin, Ethereum, and "altcoins."
"It is imperative that your agencies work together to address the lack of information about cryptomining's energy use and environmental impacts," the writers urged.
Here are the (partial) receipts
To make their case, Senators Elizabeth Warren (D-MA), Sheldon Whitehouse (D-RI), Ed Markey (D-MA), and Jeff Merkley (D-OR), along with representatives Jared Huffman (D-CA), and Rashida Tlaib (D-MI), say there's no need to look beyond the industry itself.
The sextet said they reached out to seven of the largest cryptomining companies in the US to get information about their facilities, energy sources, consumption, and climate impact of their operations. The group contacted Riot, Bit Digital, Bit Deer, Stronghold, Marathon, Greenidge, and Bitfury.
[2]
"None of the companies provided full and complete information in response to our questions. But the information they did provide reveals that these companies' mining operations are significant and growing, have a major impact on climate change, and that federal intervention is necessary," the representatives said.
[3]
[4]
The most notably obfuscated reply came from Riot, and led the letter writers to question self-reported sustainability metrics. According to the letter to the EPA and DoE, Riot told the representatives that its Coinmint facility in Oklahoma ran almost entirely on hydroelectricity.
"But its Whinstone facility, which is seven times larger, uses power from the Texas grid that relies on coal or natural gas for more than 63 percent of its generating capacity," the representatives wrote. The letter noted that the Crypto Climate Accord, cited by Bit Digital as proof it was taking steps toward decarbonization, is nonbinding.
[5]
Based on self-reported numbers, those seven cryptomining companies plan to scale up by 230 percent in the next few years, which would require enough energy to power more than 1.9 million homes. Los Angeles, the letter points out, has 1.4 million households.
Everything is bigger in Texas
Since 2019, when the US was only mining around 4 percent of the Bitcoin in the world, mining bans in China and elsewhere pushed the [6]total US share to [7]nearly 40 percent in May 2022. That makes the US the largest Bitcoin miner in the world.
This has driven up energy bills in some cities, like Plattsburgh, NY, where the letter said residential power bills were $300 higher than usual thanks to cryptomining. Plattsburgh became the first city in the US to issue a [8]moratorium on new mining operations , which has since been lifted.
[9]India's Internet Association ends crypto advocacy to do something more productive
[10]Crypto lender Celsius in Chapter 11 deep freeze
[11]Global financial stability regulator signals crypto rules are coming soon
[12]Now-frozen crypto-lending biz Celsius accused of devolving into a Ponzi scheme
Cryptomining is also experiencing a surge in Texas, the letter notes, where the state electrical grid is [13]already taxed and considered [14]unstable due to its isolation from regional power grids. During a recent heatwave, cryptomining companies in Texas were urged to cut power to their facilities to ease electrical stress, which most reportedly did. While that helped, it wasn't a solution, University of Texas Austin and Webb Energy Group research associate Joshua D Rhodes [15]told the Texas Tribune .
"I don't think [miners shutting down] single-handedly saved [the grid]. It was part of a suite of actions across energy consumers that helped keep the grid stable," Rhodes said.
Aren't crypto prices and energy use down?
Since [16]cryptocurrencies crashed in June, there has been an unsurprising drop in energy used to mine digital currencies – [17]as much as 50 percent in the case of Bitcoin.
Prior to the crash, the Bitcoin network was using approximately 204.5 TWh of power per year. Most recently, Digiconomist has pegged [18]Bitcoin's consumption at 132.84 TWh/year. While a significant drop, that's still the same amount of energy used annually by Argentina, and the same carbon footprint as Columbia.
Cryptocurrency defenders have previously [19]tried to absolve themselves of responsibility for emissions from their operations by arguing that pollutants are emitted not by them, but by power plants they don't control. The rebuttals from cryptocurrency industry leaders were directed at a May letter from Rep Huffman and other congressional Democrats, who were asking the EPA to investigate the energy costs of cryptocurrency mining.
It appears not much has changed in the intervening months. Huffman is a signee on the latest letter, which extends the argument that cryptomining is a waste of energy – even clean energy – beyond saying miners shouldn't be absolved of the greenhouse gasses their operations indirectly create.
[20]
"Miners are using huge quantities of electricity that could be used for other priority end uses that contribute to our electrification and climate goals," the letter said. The sextet of representatives asked for the DoE and EPA to provide it with plans on how it intended to enforce reporting from cryptocurrency miners by August 15, at which time Congress will be in recess. ®
Get our [21]Tech Resources
[1] https://www.warren.senate.gov/imo/media/doc/2022.07.15%20Letter%20to%20EPA%20and%20DOE%20Re%20Cryptomining%20Environmental%20Impacts.pdf
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2YtWDpmVZdIinf3EF8HR1KQAAAE0&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
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[6] https://www.theregister.com/2022/05/19/despite_ban_china_surges_back/
[7] https://ccaf.io/cbeci/mining_map
[8] https://www.coindesk.com/layer2/miningweek/2022/03/21/after-short-lived-ban-ny-town-is-still-reckoning-with-crypto-miners-next-door/
[9] https://www.theregister.com/2022/07/18/indias_internet_association_quits_cryptoboosting/
[10] https://www.theregister.com/2022/07/14/frozen_cryptocurrency_lending_biz_celsius/
[11] https://www.theregister.com/2022/07/12/fsb_crypto_regulation_soon/
[12] https://www.theregister.com/2022/07/08/frozen_cryptocurrency_lending_biz_celsius/
[13] https://www.theregister.com/2021/02/17/texas_blackouts_semiconductor_fabs/
[14] https://texasscorecard.com/state/study-unreliable-energy-is-destabilizing-texas-power-grid/
[15] https://www.texastribune.org/2022/07/15/crypto-energy-texas-power-grid/
[16] https://www.theregister.com/2022/06/13/celsius_freeze_wipes_out_18/
[17] https://www.theguardian.com/technology/2022/jun/24/electricity-consumption-mine-bitcoin-plummets-crypto-crisis-widens-cryptocurrency
[18] https://digiconomist.net/bitcoin-energy-consumption
[19] https://www.theregister.com/2022/05/03/crypto_mining_environment/
[20] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33YtWDpmVZdIinf3EF8HR1KQAAAE0&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[21] https://whitepapers.theregister.com/
Re: So What ?
Anonymous Coward
"To obtain electricity, please write to your nearest politburo office, explaining your intended use for your next kWh and how it will benefit the workers. Upon successful application (6-8 weeks), your kWh will be made available within the following 2-4 weeks. Each kWh must be applied for separately and used prior to the next application."
Re: So What ?
msobkow
Its OUR planet, and you greedy crypto-kids can go hoop yourselves.
msobkow
Gee, crypto miners reporting bullshit numbers about a bullshit imaginary economy with bullshit "investments" that keep turning out to be blatant theft and fraud.
What a shock.
So What ?
"Miners are using huge quantities of electricity that could be used for other priority end uses that contribute to our electrification and climate goals,"
It's a capitalist system. The Central People's Power Allocation Committee doesn't get to decide whether using electricity for Bitcoin is a better use than Golden Girls re-runs or illuminating large black men in tight trousers failing to play rugby properly.