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The surge in BTC mining has regulators' attention

The surge in BTC mining has regulators’ attention.

While Bitcoin is trading at multi-year lows, another important indicator, the mining hash rate, is near record highs. The BTC mining hash rate gauges the network’s overall computational power, which is also an important security parameter. Only a few percent down from its record-breaking high achieved last month, it is currently operating at nearly 210 million terahashes per second. Why, then, while prices are faltering, has mining power been so high? What effects will this have on the environment? And what do the authorities say? Let’s get going.

  • The mining power of the Bitcoin network is a rough indicator of the number of miners globally, and it has been increasing since a mining ban in China put a sizable portion of mining capacity offline last summer. BTC mining activity has increased globally over the past year, with the United States now accounting for over 38% of worldwide activity and taking the lead globally.
  • Regulators have begun to pay more attention to the business as it has flourished in the United States. The White House is preparing a report on cryptocurrency mining and the environment in response to the Biden Administration’s executive order on “the responsible development of digital assets,” which will look at, among other things, the impact that mining operations may have on stabilizing electric grids by ramping up when demand is low and shutting down when the market is at its highest.
  • A law that would impose a two-year embargo on new coal and natural gas-based mining operations is awaiting Governor’s signature in New York, which now hosts around 10% of U.S. BTC mining. While a large portion of the cryptocurrency sector points to the thousands of jobs lost if the measure succeeds, some in the state argue that restricting energy-intensive proof-of-work mining would assist in achieving climate goals. Meanwhile, Governor has promoted cryptocurrency mining to improve the kind of energy grid resilience the White House research is examining in Texas, another U.S. hotspot where around 11% of all BTC mining takes place.
  • The cheapest energy sources are what miners are motivated to locate, which increasingly means renewable and recycled energy. Flaring, a method natural gas companies use to burn extra production is terrible for the environment and serves no one. Mining companies are increasingly using flare gas and turning the excess energy into money without increasing emissions. Crusoe Energy, a firm that aims to turn extra power into Bitcoin, recently received $350 million and is pursuing flare-powered mining in North Dakota with ExxonMobil and in the Middle East with the government of Oman.
  • The governor of North Dakota recently disclosed intentions to collaborate with Bitzero Blockchain, a different renewable mining company, to build a $500 million facility that will use the heat produced by the mining process to warm a greenhouse that will grow food. And wealthy nations are not the only ones carrying out these projects. Africa’s largest electrical supplier recently revealed plans to provide Bitcoin miners access to extra geothermal energy, potentially positioning the country as a new mining hotspot.

Why it’s essential: Tesla made news last year when it decided against accepting Bitcoin, citing the consumption of fossil fuels in the mining process. Since then, several environmentally friendly mining techniques have become more prevalent, including flare-powered mining. With the construction of a solar-powered mining operation in Texas, Tesla has officially announced its entry into the sustainable mining industry.