How Bitcoin mining devastated this New York town

Economist Matteo Benetton, co-author and professor at Hass School of Business at the University of California, Berkeley, says crypto mining could weaken the region’s economy. In areas with static electricity, operating systems absorb grid power, which can lead to loss, distribution, and shutdown. Even in areas with sufficient energy sources, such as New York, the mines may be closed to other industries that may have lost hundreds of jobs. “While there are special benefits, through the electronics market, there is funding for human resources,” Benetton said.

The results are heard across the country. Benetton says there are significant incentives for as many servers to operate as possible, and now he wants more transparency in the industry’s energy efficiency. That is not a popular idea in the industry. But, says Benetton, “if you are really doing what is right, you should not be afraid to disclose the information.”

The federal government does not monitor the use of cryptocurrency power, but Securities and Exchange Commission chairwoman Gary Gensler recognizes that there are gaps in the law. In his 2021 speech at the Aspen Security Forum, he described the industry as “Wild West.”

As long as the mines become more profitable, Read warns, crypto bans simply change the dynamics to new locations. After China banned crypto mining in 2021 from achieving its carbon reduction targets, jobs rose in places like Kazakhstan, where electricity comes mainly from coal. As a result, a recent study has found, the use of Bitcoin for renewable energy decreased by half between 2020 and 2021, by 25%.

Even when companies sell renewable energy, its use makes it a great alternative to emissions.

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Read removes the promises that green money or good performance can solve this problem. In a recent paper work, he found that the use of cryptocurrency power will rise another 30% by the end of the decade — creating an additional 32.5 million metric tons of carbon dioxide per year. As long as the price of Bitcoin goes up, mining rewards are increasing, which encourages the use of energy, he says. He refers to this as the “Bitcoin Dilemma.”

The 32 million tons of carbon dioxide have made the climate extremely severe, either from the north of New York or Kazakhstan. “We all suffer because of this,” says Read.

Lois Parshley is a scientific journalist.

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