In a turn of events aiming to address environmental issues, the US Energy Information Administration (EIA) is set to start monitoring power consumption by cryptocurrency miners. This decision fills a looming gap in data and triggers a much-needed public discussion about the high levels of electricity consumed in the burgeoning industry, especially with the impending Bitcoin halving.
From next week, some selected crypto miners will be asked to give account of their electricity usage. This follows a mandate that was put forward by the Office of Management and Budget on January 26, 2024.
According to Joe DeCarolis, the EIA Administrator, the agency is committed to scrutinizing the energy footprint left behind by crypto mining activities in the United States. He added that the agency plans to keep a keen eye on how this demand is changing, the areas experiencing high growth, and the source of the electricity fuelling this demand.
The recent shift of crypto mining operations from China to the US has led to an increase in energy demand in certain American neighborhoods. This development has sparked concerns among regulators, especially in light of the imminent Bitcoin halving event which will increase the cost of mining Bitcoin.
Mining Bitcoin and other similar cryptocurrencies require significant amounts of energy. Miners need powerful machines to solve intricate puzzles that validate blockchain transactions. The demand for electricity in this industry is high, and miners are competing for Bitcoin rewards. As a response to critics who liken the sector’s consumption to that of entire nations, the industry is gradually adopting greener practices.