Bitcoin Mining is Gobbling Up New York’s Precious Renewable Energy

Bitcoin is a popular cryptocurrency (photo: Kanchanara)

Like time inside Steve Miller’s classic rock songNew York’s decarbonization goals continue to fall into the future.

Widening of the road they are stimulating more driving. Suburban resistance to upzoning it is enclosing itself in an expansion that demands energy. Electricity from state wind turbines declined last year1, although climate advocates, relying on dubious models from the U.S. Department of Energy, have exaggerated future carbon reductions by “electrifying everything.”2

Promising developments such as offshore wind leasing and new transmission a transporting hydroelectricity from Quebec it barely compensates, if at all carbon emissions unleashed when closing Indian Point nuclear power plant. As I have indicated elsewhere, the closure of existing carbon-free energy sources means that new ones do not really reduce emissions; at best, they keep us running in place, making big holes in promises to achieve a carbon-free grid by 2040.

To this bleak picture adds crypto mining: huge computer networks that eat electrons running 24 hours a day, 7 days a week, so digital currencies like Bitcoin and Ethereum can keep virtual “coins” or “tokens” in ledgers ciphers that avoid traditional third parties such as banks.

From Buffalo and Finger Lakes to the northern level of the state, cryptographic entrepreneurs are building new generators or firing retirees to boost their cryptographic mining operations. Other cryptographic sites draw on the web.

Of its own origin or not, the necessary electricity ends up forcing the burning of more fossil fuels, as Sierra Club researchers documented in extensive comments this week to the Office of the President of Science and Technology Policy, moving away from the state’s ambitious decarbonization goals. For what purpose?

The Crypto Steps
Enigmatic, opaque, futuristic: Crypto-currency calls for historical analogues. Here’s one: Uber.

Uber emerged in the early 2010s not as a new form of transportation but as a new type of transportation. network enabling the reconfiguration of transport. Its appeal has been tailored around three promises: it would improve traffic efficiency by eliminating cruise fares; would expand the convenient rental vehicle service outside of Manhattan; and would end in denials of service to people of color.

The packaging, elegant and application-enabled, augured a frictionless digital future. With a few taps the New Yorkers could summon a chariot.

The results were mixed. Now we know that Ubers’ storage in Manhattan caused even more traffic jams than a cruise taxi. But Uber has expanded access to rental vehicles, while bleeding MTA users, and worse, it rained economic ruin about the yellow taxi industry.

Bitcoin and other cryptocurrencies come with their own brilliant promises, though they are more chameleon-like. (Earlier this year New York Times columnist Paul Krugman he despised them as a “word salad”). Among them, as Annie McDonough reported recently en City and Stateis the prospect of releasing bank and discriminatory loans rooted in US financial institutions.

“[Crypto backers] see technology as an economic equalizer, “he writes McDonough. “It simply came to our notice then discriminated against by banks or blocked of investment opportunities, including people of color and low-income communities. “

Really? In New York, and almost certainly anywhere else, unbanked homes are overwhelmingly so they lack the necessary credit history or liquid assets (bank accounts, debit cards, credit cards) to buy cryptocurrency tokens. In addition, scammers and scammers are finding fertile cryptographic territory for high-tech scams, according to New York Times columnist Farhad Manjoo. marked this month. Possibly a safer and more effective way to eradicate credit segregation would be to speed up Biden administration regulations. add teeth to the Community Reinvestment Act – the 1977 law intended to repair decades of redlining.

The emergence of crypto-front groups like the Blockchain National Network of Women of Color Policy demonstrates the industry’s willingness to exploit deep bitterness over the red legacy. So does participation in the cryptographic lobby of Bradley Tusk, Mike Bloomberg’s advisor who a decade ago deftly unleashed black fury over persistent taxi discrimination to help Uber eradicate taxi drivers’ exclusive right to pick up hail on the street in Manhattan and , later, helped to defend itself. serious regulation of the application use industry for several crucial years.

Let’s burn the grate
There is no record of electricity consumed by cryptographic mining in New York State. However, worldwide, cryptocurrencies consume about 91,000 gigawatt-hours (or 91 billion kilowatt-hours) of electricity per year, according to a New York Times Survey of cryptography last September. 16% of that, or 15,000 GWh, is said to be consumed in the United States.

Although New Yorkers are accustomed to thinking of our state as resource-poor, our abundance of hydroelectric power and encapsulated fossil fuel plants has attracted enough cryptographic mining to account for 13 to 14 percent of the U.S. total. UU. an industry source cited by City and State. Based on that share, cryptography consumes about 2,000 GWh of electricity annually in New York State, a figure that could grow not only with increasing transactions, but also with increasingly complex digital encryption.

Even keeping at 2,000 GWh, that’s a lot of juice: more than the electricity generated last year from all the solar panels in residential buildings in the state, or more than the one that will come from the first 100 marine wind turbines promised once the industry puts running (see chart below). And while cryptocurrencies in New York consume less electricity than all current solar or wind turbines, that comparison is not comfortable, as those renewables must be shifting fossil fuels (mostly gas fracking) from the state grid – what they can’t do if their production is being effectively consumed by mining Bitcoin.

The word operative, “effectively,” encompasses two distinct but complementary dynamics. Grid dynamics dictate that any new place of demand, such as Bitcoin, forces utility companies to resort more to fossil fuel generators, because non-carbon, nuclear and renewable sources are already working as much as possible. O climate dynamics is that from a state perspective, the additional use of fossil fuel generators negates the carbon reduction benefits that wind, solar and nuclear would otherwise provide.

This perspective sheds some light on claims that a particular cryptographic facility is being a renewable source. Connecting cryptocurrencies to a renovated hydraulic dam or solar or wind farm may sound green, but all those buzzing hard drives are actually diverting carbon-free electricity that will now “not be available to power a house, factory, or electric car.” as the Sometimes‘The story of 2021 says. (Someone hopes that the irony of fans of cryptocurrencies that misrepresent green electrons will not be transferred to the accounting of their currency).

Carbon Tax vs. Crypto?
A rigid New York State carbon tax could slow down and even reverse the rise of cryptocurrency here (also nationwide).

Rising electricity prices would undermine any competitive advantage that Bitcoin miners gain by being located in New York. Some miners would leave, others would stay away, and those who stayed would try to reduce the impact of the tax by improving their efficiency.

Not only that, cryptographic miners looking for a carbon-free generation would find themselves increasingly competing with non-cryptographic companies looking to contain theirs energy costs. Other companies, which consume less energy per dollar of revenue, would be able to exceed the offers of cryptographic companies.

The possible flight to other jurisdictions could also help create a momentum to tax carbon emissions there as well, as more states and countries conclude that jobs and cryptographic revenues are not worth straining their networks, not to mention that if their air deposits are destroyed. stealing their silence.

It’s not about keeping the carbon tax as a one-bullet crypto killer (we need a lot of bullets for that, the bigger the better), but to illustrate its broad potential to stop new frivolous (and in this case imbecile) uses. of electricity before. they can gain a foothold.

Why not regulate cryptocurrencies? That battle would take years, limiting policy resources as emissions continued to spit. Worse, we have neither the time nor the ability to see the corners needed to enact, in a fragmentary way, restrictions on each new place of energy demand.

Although energy efficiency continues to work wonders: total U.S. electricity consumption last year was only slightly higher than in 20053 – Low-cost electricity causes new hell of unnecessary use that undoes much of that progress.

Carbon taxes alone cannot solve everything that affects the climate. But they could, for a change, come up with solutions.

Charles Komanoff, a New York policy analyst and environmental activist, runs the Carbon Tax Center. On Twitter @Komanoff.

1The U.S. Energy Information Administration, “Electric Power Monthly,” Table 1.14.B, “Net Generation of Utility-Scale Utility Installations from the Wind,” shows 4,522 GWh in New York State in 2020 and 4,387 GWh in 2021.

2To estimate future carbon reductions from New York City’s December 2021 ban on heating and gas cooking in new buildings, advocates and December 15, 2021 New York Times history reporting on this, both cited a publication of December 10, 2021, Stopping gas connections at new construction in New York would reduce carbon and costs, by the consulting firm RMI. The authors of the RMI point out that their calculations used future power grid emission factors modeled by the U.S. DOE’s National Renewable Energy Laboratory “Cambium” dataset. Examination of this dataset reveals, among otherswhich is a five-fold increase in New York State’s onshore wind power between 2020 and 2022.

3U.S. Power Information Monthly figures, “Electric Power Monthly,” Table 7.2a Net Electricity Generation: Total (All Sectors) “supplemented by Table 10.6 (” Net Electricity Generation from Distributed Solar “) indicate the total U.S. electricity generation of 4,164,565 GWh in 2022 and 4,055,785 GWh in 2005. For those concerned, the average annual compound growth rate implied during those 17 years is a tiny 0.17 percent.

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