Bitcoin miners have formed a partnership with fossil fuel companies, scaring environmentalists

Bitcoin miners have formed a partnership with fossil fuel companies, scaring environmentalists

The Scrubgrass power station in Venango County, Pennsylvania, had been on the verge of bankruptcy four years ago because energy customers opted to purchase renewables or cheap natural gas. Scrubgrass then switched to Bitcoin.

Scrubgrass now burns sufficient coal waste to power around 1,800 cryptocurrency mining machines, according to a holding company named Stronghold Digital Mining situated in Kennerdell, Pennsylvania, which purchased the plant. The business says in documents filed with the US Securities and Exchange Commission (SEC) ahead of the initial public offering that these computers, dubbed as miners, are stacked inside shipping containers beside the power plant. Coal waste results from decades of mining inside the area, and it has been piled up in massive black heaps. Stronghold estimates that Scrubgrass is currently burning roughly 600,000 tons of it each year.

According to SEC documents, Stronghold intends to employ 57,000 miners by the close of 2022, an increase that will necessitate the acquisition of two more coal waste power facilities in the area. Scrubgrass exemplifies an increasing tendency in the crypto realm that has some conservationists concerned. Bitcoin mining is reviving America’s old fossil-fuel power plants, generating a demand that environmentalists say hinders investment in the renewable energy alternatives at a time when a transition away from carbon-emitting energy sources is critical.

Bitcoin and other cryptocurrencies make use of blockchain technology, which is effectively a shared database of the transactions that must be verified and protected. The network is protected by “miners,” who use sophisticated computers to engage in a massive guessing game that confirms transactions in the end. If a computer “wins” the game, it is given a newly produced bitcoin, which is now worth around $40,000. The process uses a great deal of electricity, and also, the computers produce a lot of heat, so they need industrial cooling systems that use even more energy.

As per the Cambridge Bitcoin Electricity Consumption Index, the Bitcoin network presently consumes more electricity compared to many small countries, such as the Philippines. “Bitcoin mining is wasteful by design,” stated Alex de Vries, who serves as the Dutch researcher, economist, and founder of Digiconomist, a website that measures cryptocurrency’s environmental impact. “It is a system in which members are required to squander resources in order to offer some level of network security. The higher the value of bitcoin, the more money it is worth, and the more money it is worth, the greater we spend on resources.”

As per research firm Rystad Energy, the trend has increased in recent months as the Chinese government clamped down on bitcoin mining, which accounted for around two-thirds of worldwide bitcoin mining capacity until May. China went so far as to declare all cryptocurrency transactions illegal, dealing another blow to the industry. However, the crackdown on bitcoin mining has already resulted in an influx of bitcoin mining companies into the United States (U.S.), with some states, such as Kentucky and Texas, embracing them with arms open, cheap electricity, and tax breaks.

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