Cryptocurrency mining in the US, people are amazed...

Cryptocurrency mining in the US, people are amazed…


Summer on Lake Seneca in New York (USA) is always crowded with people rowing, fishing, swimming and camping along the shore. But this year those scenes are gone, partly due to the round-the-clock operation of cryptocurrency miners operating in the gas-fired power plant on the shores of Lake Seneca.

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Gas thermal power plant on Lake Seneca.

The plant is owned and operated by the privately owned company Atlas, and operated by a business called Greenidge Generation.

They have increased their electricity production in a recent year, using mainly fossil fuels. But the power from this plant is largely not for the surrounding towns, but for the Bitcoin cryptocurrency mining industry.

Cryptocurrency mining often depends on high power consuming computers to handle complex algorithms. At Greenidge Generation, computers operate 24/7 to mine digital currency. Greenidge Generation’s factory currently has up to 8,000 computers and is expected to install more.

Therefore, the use of gas-fired thermal power plants had to consume huge amounts of water to cool the system. Water use at the gas-fired thermal power plant operated by Greenidge Generation causes it to draw 139 million gallons of water and release 135 million gallons of water per day, with temperatures reaching 42 degrees Celsius in summer and 30 degrees Celsius in winter.

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Cryptocurrency mining system at Greenidge Generation.

NBC channel (USA) quoted a local named Abi Buddington as saying: “The lake heats up so much that you feel like you’re in a hot tub.”

Rising water temperatures can put stress on the organisms in Lake Seneca.

Notably, in March, Greenidge Generation said that by December, electricity consumption for cryptocurrency mining is 45 megawatts and by 2025 will increase to 500 megawatts. Gas-fired power plants in the US have the capacity to generate between 1,500-3,500 megawatts. Thus, Greenidge Generation will not give up on bitcoin mining and the warming of the water in Lake Seneca will become more complicated.

Obviously, this has made people in the area unhappy. On June 5, people protested against the factory near the New York Environmental Protection Agency. They warn that if the authorities do not act, 30 other power plants in New York are also at risk of becoming cryptocurrency mining facilities.

One of the reasons is that new operators of power plants can continue to use licenses issued many years ago without going through an in-depth environmental assessment.

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The power plant not only produces to serve residents in the area, but mainly mines bitcoin.

According to documents obtained by the nonprofit organization Earth Justice, by the end of 2020, even operating at only 13% of capacity, the carbon dioxide emissions from the power plant on the shores of Lake Seneca totaled 243,103 tons. Before the start of cryptocurrency mining, the amount of carbon dioxide emitted by this factory was 119,304 tons in 2018.

Imagine if this riverside gas-fired power plant could operate at 50% or 100% capacity, the damage to the surrounding environment could be difficult to measure.

Cambridge University (UK) once estimated that the amount of energy used by cryptocurrency miners globally in a year is more than the total energy consumed by Chile. When energy is extracted from fossil fuels, this process leads to huge carbon emissions.

The focus on cryptocurrency mining can cause environmental damage that is hard to fix.

In the US, not just in New York, Texas is said to be a place that could soon become a golden land for cryptocurrency miners.

More than half of the world’s Bitcoin digital currency “miners” are concentrated in China, but now they are no longer “living land” due to the government crackdown and the exodus of the army. This may be aimed at Texas, USA.

One of the reasons is that the state of Texas has a reputation for having some of the lowest energy prices in the world and its share of renewable energy is growing over time, with 20% wind energy in 2019.

Texas allows customers to choose between different electricity providers, and importantly, the state’s political leaders are very pro-cryptocurrency – a dream condition for a miner looking for cheap energy. and welcome door.

Experts believe that the hash rate (hashrate – an industry term used to describe the algorithmic power of all miners in the Bitcoin network) will increase sharply in North America over the next few months.

“Texas not only has the cheapest electricity in the US, but it also has one of the cheapest electricity prices in the world,” said expert Brandon Arvanaghi, formerly a security engineer at crypto exchange Gemini. Setting up a Bitcoin mining company is also very easy… If you have 30-40 million USD, you can become a top mining company in the US.”

“You will see a drastic change in the next few months,” Mr. Arvanaghi said. We have governors like Greg Abbott in Texas who are promoting cryptocurrency mining. It’s going to become a real industry in America, which is going to be unbelievable.”

Wyoming also tends to favor Bitcoin and could be another mining destination.

However, there are still some major limitations to the US becoming the global Bitcoin “farm”. First of all, the preparation time to build the actual physical infrastructure required to take on miners can be anywhere from 6-9 months.

The fact is that there have been exodus of virtual currency miners in China – where the Government does not accept virtual currencies and calls for a crackdown on Bitcoin mining and trading.

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Technicians repair Bitcoin “miners” at Bitmain’s facility in Inner Mongolia, China, August 11, 2017. Photo: Bloomberg

De La Torre, Vice President of Poolin, a Bitcoin mining pool based in Hong Kong (China), said: “We don’t want to face some new kind of ban in China every year. So we’re trying to diversify our global mining hash rate and that’s why we’re moving to the US and Canada.”

Since large-scale miners compete in a low-margin industry where the only variable cost is energy, they always want to switch to the cheapest sources of electricity in the world.

“Chinese miners or miners living in China are looking to Central Asia, Eastern Europe, the US and Northern Europe,” said Carter.

Another possible destination is China’s neighbour, Kazakhstan. The country’s coal mines allow for an abundant and cheap supply of energy. Kazakhstan also has a looser construction policy, which bodes well for Bitcoin miners who need to urgently build infrastructure in a short amount of time. But whether Kazakhstan is a destination or simply a stopover on a longer migration westward remains to be seen.

Hai Lam

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