Since the ban in China, Bitcoin (BTC) mining has become very popular in the United States.
Recently, the Department of Energy’s Energy Information Agency (EIA) asked all miners to submit detailed data on their energy consumption.
A preliminary study by the EIA shows that Bitcoin miners may be consuming more than 2% of all electricity in the US
Huge growth in Bitcoin miners in the US since the China ban
Although there are still a few small miners who mine cryptocurrencies at home, the majority of Bitcoin mining now takes place in so-called Bitcoin farms.
These are large systems with special hardware for mining. Still, the biggest cost for miners is related to electricity.
For years, the vast majority of miners were in China because of cheap energy. The operation was particularly popular next to hydroelectric power plants. At least until China introduced a complete ban on crypto and mining in 2021.
After Prohibition, a large portion of miners moved to the United States, primarily to Texas. The state provides relatively cheap electricity, especially in calm weather. However, when the weather in Texas becomes extremely hot or cold, miners are forced to stop operations, but they receive compensation for doing so.
Six months after the ban in China, the share of Bitcoin mining in the U.S. grew from about 18% to 37.8% in 2022, according to data from the Cambridge Bitcoin Electricity Consumption Index. That share is now expected to be even higher.
More than 2% of electricity in the US goes to Bitcoin mining
However, there appears to be some uncertainty in the consumption estimates. That is why the EIA recently decided to ask all mining companies to report their consumption in detail.
In a preliminary study, the EIA concludes that energy consumption by miners in the United States has increased sharply in recent years.
According to the EIA, 2.3% of all electricity in the US could already be used for Bitcoin mining. This corresponds to the energy consumption of a small state.
The government agency describes this as worrying. For example, certain old fossil fuel power plants may have already closed if they were unable to provide electricity to Bitcoin miners.
As a result, Bitcoin miners are accused of contributing to the emissions from such fossil fuel power plants.
This does not apply to all Bitcoin miners. More than 50% of companies now obtain their energy from green sources.
Miners also regularly settle near natural gas fields, which supply their excess energy to Bitcoin miners. Otherwise, such companies would burn their methane gas, which would be even worse for the environment.