As Bitcoin miners flock to the United States, both politicians and environmentalists are warning about the environmental costs of the energy-intensive industry. In September, the White House released a report citing that the US hosts about a third of the world’s crypto mining operations and consumes up to 1.7% of the country’s electricity, equivalent to all household lights.
A new study by Cornell University researchers argues that more efficient distribution of bitcoin mining in states that prioritize renewable energy and have lower operating costs can allay environmental concerns, potentially mitigating damage.
As power grids increase the use of renewable energy sources such as solar and wind, and carbon capture technology is scrutinized, Bitcoin mining may become more sustainable at an accelerated pace.
dr Fengqi You, a professor of energy systems engineering, led the research hoping to advance better public policies related to mining operations.
“As more of these mining rigs come into the US and more citizens think about investing in these sectors,” he said, “what are the implications for the climate and our energy systems?”
Bitcoin uses a proof-of-work consensus mechanism: In order for transactions to be recorded on the public ledger known as the blockchain, different people – or miners – must compete to solve complex algorithms. The winner validates the block and is rewarded with bitcoin.
The process requires immense computing power, with energy consumption matching the needs of countries like Finland. It also results in massive CO2 emissions – an estimated 90.76 million tons annually, comparable to Greece’s carbon footprint.
In recent years, operations have shifted to the US as previous hubs such as China have banned bitcoin mining. They have concentrated in Texas, with its deregulated energy grid, and in New York. The two states account for 14% and 19.9% of Bitcoin’s processing power in the United States, respectively.
Cornell’s study found that the current distribution of mining operations across the United States does not make sense from either a cost or emissions perspective.
“Every state has its own electricity mix,” she said wealth. Some states rely more heavily on hydroelectric power, others on nuclear power or natural gas.
When his team examined the total cost of ownership for mining operations in different states, including capital and operating costs, they found a strong correlation between using clean energy and reducing project costs, which they said was surprising given that renewable energy is often considered comparatively expensive.
Going forward, it is crucial to move mining operations to locations with better renewable capacity, not only from an environmental perspective but also from an economic perspective.
While the map above shows the best-performing states near-term — with places like Washington and New York as top contenders — they’ve also conducted an analysis of how the picture could change with increased political support for renewable energy. In this scenario, states like Vermont and Oregon become cheaper. Texas, they added, is neither the best nor the worst choice given the relative carbon emissions associated with its power grid.
While the study doesn’t endorse bitcoin mining, it recognizes that it likely will remain — and operations can be optimized to reduce carbon emissions and costs.
“Ideally, if they only use renewable energy to mine bitcoin, we could argue that they won’t have any impact on the climate,” You said. “But in practice, of course, we know that we are not yet at the stage of a 100 percent renewable energy network.”