The environmental impact of cryptomining

A new handbook – “The Energy Bomb: How Proof-of-Work Cryptocurrency Mining Worsens the Climate Crisis and Harms Communities Now” – from Earthjustice and Sierra Club is the first to comprehensively document the explosive growth of cryptocurrency mining in the United States and examine, how this industry affects utilities, energy systems, emissions, communities and taxpayers.

Cryptocurrency mining is an extremely energy-intensive process that threatens the ability of governments around the world to reduce our reliance on climate-warming fossil fuels.

If we don’t act now to limit this growing industry, we will fail to meet the goals of the Paris Agreement and the Intergovernmental Panel on Climate Change to limit the warning to 2°C.

This guide explains several such examples where Fossil fuel mining has increased local air, water and noise pollution, cost to others and climate pollution at a time when we should be doing everything in our power to go in the opposite direction to mitigate the worst effects of the climate crisis.

The Explosive Growth of Cryptocurrency Mining in the United States

After cryptocurrency mining was banned in China in 2020, the number of mining operations in the United States exploded.

In the year leading up to July 2022, Bitcoin consumed an estimated 36 billion kilowatt hours (kWh) of electricity, as much as the total electricity consumption in Maine, New Hampshire, Vermont, and Rhode Island combined for the same period.

The past two years have shown the industry’s preferential search for readily available energy and minimal regulation, bringing defunct coal and gas plants back online, flooding the restructured Texas power market, and tapping into grids that are poorly overseen by regulators.

This explosive growth puts a strain on energy networks, increases retail electricity prices and increases overall carbon emissions and local air pollution.

The design of proof-of-work cryptocurrency mining gives miners an incentive to ramp up operations as quickly as possible, often regardless of the power source.

In fact, large mining operations have shown their willingness to invest in otherwise uneconomical energy sources, such as B. decommissioned coal-fired power plants or gas-fired power plants with low capacity, as long as this electricity can be made available quickly. Unlike other large consumers of electricity, cryptocurrency mining operations have a short time horizon and most have shown little interest in investing in new clean energy.

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