Bitcoin’s latest surge is great for miners — not so much for the environment
Bitcoin’s latest surge is great for miners — not so much for the environment
You may have heard that bitcoin had a bit of a moment last night. The granddaddy of cryptocurrencies crossed the $100,000 threshold, a record high. Bitcoiners are apparently still very enthusiastic about a more crypto-friendly Trump presidency.
Rising bitcoin prices are also very good for bitcoin miners — the companies with souped-up computers that keep that whole blockchain thing running. But what’s good for bitcoin miners may not be so great for our environmental goals.
Not surprisingly, bitcoin miners get paid in bitcoin. So when the price of bitcoin shoots up $40,000 like it has since April, bitcoin mining giant Mara Holdings makes more money — at least, for awhile.
“There’s this period of bull run, as the industry calls it, where miners can make a lot of money because price is running much faster than miners’ ability to add capacity,” said Fred Thiel, CEO of Mara Holdings.
Eventually other bitcoin miners plug more and more of their machines into the grid to chase digital gold, and Thiel has more competition.
But generally speaking, he expects the good mining times to last, partly thanks to President-elect Donald Trump.
“He wants the U.S. to be the biggest country relative to bitcoin mining and he wants to make sure that bitcoin miners have equal and fair access to energy,” Thiel said.
Bitcoin mining consumes a lot of electricity — more than the entire country of Poland in a given year.
Liz Moran, a policy advocate at the environmental advocacy group Earthjustice, said crypto mining is reinvigorating fossil fuel energy sources.
“In some parts of the country, it’s taking on line gas plants that have actually been shuttered and bringing them back online just for the purposes of cryptocurrency mining,” she said.
Bitcoin mining isn’t the only new technology that is putting a new and significant strain on energy grids. Artificial intelligence firms are now competing with bitcoin miners for the same electricity sources to power their massive data centers.
Blockchain Association CEO Kristin Smith said so far, crypto has gotten more political pushback.
“I don’t think that we’ve seen that same level of scrutiny with AI. I certainly think it will probably ramp up as it gets bigger going forward,” she said.
Smith said the real solution is to add more clean energy sources to the grid in the first place.
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