Municipalities begin pulling the plug on cryptocurrency miners



Industry’s mammoth electricity demands spark energy supply troubles, and even safety concerns

Less than one job per megawatt.

That’s the eye-popping estimated energy give-and-take required for the cryptocurrency mining industry—and it’s why more municipalities are putting the brakes on the electricity-gobbling ventures every day.

In Quebec, Magog is the latest of 21 municipalities in that region that has imposed a moratorium on future cryptocurrency mining activity.

The home of the Montreal Canadiens, the 21,273-seat Bell Centre, uses five megawatts (MW) of energy a day. By contrast, two cryptocurrency mining companies that have recently set up shop in former Magog factory buildings were set to use a combined 20 MW each day.

Even in Quebec, where hydroelectricity offers some of North America’s cheapest power rates, it’s ringing alarm bells.

“Cryptocurrency mining is not a very big job creator. The analysis we have shows that cryptocurrency projects will create less than one job per megawatt,” says Hydro-Quebec spokesman Marc-Antoine Pouliot.

“That’s pretty low if you compare it with data centers, if you compare it with the aluminum industry or other huge consumers.”

As a decentralized system, cryptocurrency relies on airtight network security, and pays miners to validate legitimate transactions—and in the process, add those records to a public ledger, or blockchain. However, cryptocurrency mining requires the continuous operation of high-powered computers to validate these transactions by solving complicated math problems.

In upstate New York, another spot where hydroelectricity has traditionally created cheap power rates, a surge in cryptocurrency mining activity recently forced the city of Plattsburgh to buy power on the open market—and saw residents hit with enormous energy bills.

Plattsburgh passed its own 18-month ban on cryptocurrency mines in mid-March, citing safety concerns over the amount of heat produced.

“There’s no opportunities for them (that) I know of to give back to the community in any way,” Plattsburgh councillor Dale Dowdle tells the Daily Orange. “They don’t employ many people.”

Energy utilities and regulators have mulled, and in some cases already approved, the concept of charging higher rates to crytopcurrency miners.


ENERGY MATTERS
Bitcoin is consuming enough energy to power Denmark for a year

Mining the cryptocurrency ‘consumes a ridiculous amount of energy’ estimates suggest

ENERGY MATTERS
Digitalization as transformer: Creating a truly ‘smart grid’

Digital innovation could create massive efficiencies by blurring the lines between supply and demand, says IEA


Energy Matters

In the world's conversation about energy, one point is beyond debate: Energy makes a vital contribution to people's quality of life, to society and to human progress. This is true today, and it will remain true in the future. That's why Energy Matters was created. We believe it's important to equip people with unbiased information so they may form opinions, join the conversation and feel confidence in the work and accomplishments of the energy sector. Energy Matters is an initiative that provides transparent information and perspective on energy. Here, we'll cover a range of topics: the scale of global energy; the ways energy is sourced and produced; current energy technology; forthcoming innovations; the world's future energy needs; and the sustainable sources of energy that will fill them. Because energy matters to everyone, we hope you'll rely on Energy Matters as an ongoing source of balanced information.