There’s a big new presence slurping up power from the U.S. grid, and it’s growing: bitcoin miners. New research shows that the U.S. has overtaken China as the top global destination for bitcoin mining and energy use is skyrocketing as a result.
The research, published as part of a data update to the Bitcoin Electricity Consumption Index (BECI) at the Cambridge Centre for Alternative Finance, looks at the impact of the crackdown on bitcoin mining in China, which in June issued bans across much of the country. The government officially made crypto transactions illegal in September as well. Before the crackdown, China was home to the majority of the world’s bitcoin mining.
There’s a new head honcho in town, however. Between April and August, data collected by the BECI show, the U.S. has more than doubled its share of the global bitcoin hashrate — the measure of bitcoin computing power on the network, a way to measure mining activity — increasing from 16.8% in April to a huge 35.4% by the end of August. The U.S. is followed closely by Kazakhstan with 18.1% and Russia with 11%. China’s share of the hashrate, meanwhile, dropped from 38% to near zero, suggesting that miners basically packed up and decamped en masse. That’s an incredible drop from a high of more than 75% of the global hashrate back in September 2019.
In September, BECI estimates that miners around the world used about 8 terawatt-hours of electricity (1 terawatt equals 1 trillion watts); Quartz did the maths for the U.S. miners, finding that at September demand rates, bitcoin miners in the U.S. are set to consume 35 terawatt-hours a year, double their projected energy use in April. The entire U.S. — all of our activity combined — consumed 4,222.5 terawatt hours in 2018; In that context that’s a lot of energy for just one industry that cranks out pretend internet money. (Quartz estimated that it’s about three times the electricity use of the entire country of Sri Lanka.)
In contrast to China’s crackdown, several states in the U.S. have been working extra hard recently to attract bitcoin miners. Demand in the U.S. could go even higher as a result. Politicians in Texas have been jazzed about bitcoin, with Gov. Greg Abbott and Sen. Ted Cruz suggesting that crypto mining could help the state’s struggling electric grid (which is, um, wrong). In Florida, the mayor of Miami, Francis Suarez, is a self-proclaimed bitcoin fanboy, and has touted the state’s nuclear plants as an incentive for miners to move to the Sunshine State. New York’s legislature was mulling banning mining for a few years to assess its environmental impact, but the proposal was largely shut down by supportive lawmakers as the state becomes more of a bitcoin hub. In Texas and New York, at least, miners are usually relying on fossil fuels whether its coal or natural gas.
Even as miners increasingly use up energy on the grid in the U.S., they’re also making their presence known in Washington, DC. The bitcoin lobby worked behind the scenes to try and hobble two proposals in the massive infrastructure bill, including one that would encourage a less energy-intensive form of mining. We’re only just starting to see how crypto might change the political landscape of the U.S. — and, if these numbers are any indication, we’re set to see even more.