After the Chinese government’s crackdown on Bitcoin, Ethereum, and other cryptocurrencies earlier this spring, miners have begun to relocate abroad. While investors and crypto enthusiasts might be happy to hear that, environmentalists are not.
A rude awakening
Bitcoin had reached record-high levels in recent months, topping off at nearly $64,000 in April (1). Since that point, however, it’s seen a steady decline.
Around that time, China began cracking down on crypto mining, even going so far as to ban crypto-related services altogether. As around 75% of the world’s cryptocurrency came from China, this struck a huge blow to investors and crypto enthusiasts everywhere (2).
At its lowest point this year, Bitcoin dipped below $30,000, sending investors everywhere into a panic.
An environmental impact that’s anything but digital
So what’s fueling the recent crackdown?
The environmental impact that crypto mining leaves in its wake.
While blockchain technology can be tough for non-techies to wrap their head around, essentially, miners pump crypto coins into circulation through a process known as mining. To verify these transactions, they solve complex mathematical problems. Miners use computing power to do that, and a lot of it.
At its peak, Bitcoin miners worldwide used around 136 TWh (terawatt-hours) worth of electricity (3). That’s enough energy to power all of Sweden for a year.
And remember, that’s only for Bitcoin—miners also produce hundreds of other cryptocurrencies as well.
On top of that, intensive mining operations also demand the latest in computer technology. The frequent production and disposal of these computer parts is another huge drain on the environment.
Finding a new crypto Eden
Crypto miners are a hardy people, and it doesn’t seem they like they plan to stop mining anytime soon. China may have prompted a mass Exodus, but those leaving have to settle somewhere.
As energy is the only real cost they have to worry about, crypto miners are always looking for places with the cheapest sources of power.
And, at this point in time, one of those places appears to be the state of Texas.
A Lone Star future
While Texas’ energy grid might not look stellar after its grid blackout earlier this year, it’s a beacon on the horizon for crypto miners looking to settle down (4).
Texas has a deregulated power grid that allows individuals and companies to choose the energy source they want to connect to. The Lone Star State also boasts some of the most crypto-friendly politicians in the country.
Compared to other states in the U.S., Texas does generate a fair percentage of its electricity through sustainable methods. However, the cheapest option might not be the most eco-friendly one, meaning not all customers will go green.
The levels of deregulation present worry environmentalists in the region and across the world.
In recent weeks, Bitcoin, Ethereum, and other currencies have seen their production start to bounce back. Bitcoin hash rates (hash rates measure how fast crypto gets produced) have gone back up from 90 EH/s (exahashes per second) to 100 EH/s (5).
It seems like many of the miners who left China have already found their new Eden.
Hopefully, more miners and crypto enthusiasts will start to understand the impact cryptocurrencies have on the environment.