Archive for the ‘Cryptocurrency’ Category
Unsolved mystery: How much power is crypto using? – E&E News by POLITICO
As concerns grow about what a flood of new computers, data centers and artificial intelligence operations means for the electric grid, one industry remains a massive question mark: cryptocurrency.
The U.S. Energy Information Administration estimates that mining for bitcoin and other digital currencies accounts for 0.6 to 2.3 percent of the nations electricity use. But that figure is just an approximation based on worldwide data collected by Cambridge University and publicly available information about 52 crypto mining sites.
A bid to have the agency a nonpartisan data arm of the Department of Energy collect more detailed information on how crypto miners use electricity was stymied by a lawsuit and wont be revived until after a public review. That means regulators, legislators and even power providers dont have detailed data about how an industry that has exploded in just a decade could affect the grid in the future.
Theres just not a lot of transparency, said Ben Hertz-Shargel, the global head of grid edge at consulting firm Wood Mackenzie who focuses on topics such as demand flexibility and a decentralized power system. You can look at the companies that are publicly traded, and theyll discuss plans with estimates of megawatts [consumed]. But actual demand may be very different, so you only have partial clues.
Conditions on the U.S. grid may become increasingly tight. A December 2023 report from the consulting group Grid Strategies found that the forecast for electricity demand over the next five years nearly doubled over the past year, thanks to commitments for new industrial sites, data centers, extreme weather, and the electrification of homes and cars.
The EIA estimates that U.S. electricity demand could increase as much as 15 percent by 2050, numbers that Energy Secretary Jennifer Granholm has said literally keep her up at night.
Crypto companies acquire virtual coins by solving a series of computational puzzles, a mining process that requires computers to run for hours on end. Because electricity is essentially the only expense and the price of a digital coin is the source of revenue, the industrys electricity use is typically dependent on bitcoin prices.
Right now, thats a bull market. The price of bitcoin, the largest cryptocurrency, has increased nearly 2.5 times since the end of September. That could grow after the Securities and Exchange Commission approved 11 bitcoin funds for trading on U.S. markets, which makes the assets more accessible.
According to the University of Cambridges Centre for Alternative Finance which models bitcoin electricity consumption based on factors like prices, mining equipment and energy efficiency power demand for crypto mining has also risen over six months, from an estimated 14,000 megawatts daily at the end of September to more than 19,000 MW last week.
That means utilities could see a massive load shift based on economic factors, not weather or population growth.
A February 2023 BloombergNEF report examining the main power market in Texas concluded that peak energy prices could increase by 30 to 80 percent based on the influx of cryptocurrency mining. Power prices, the report found, will be a function of new bitcoin mining facilities.
That variability a load that could shift based on market prices, not on more predictable factors like weather or population growth has led to increasing calls for transparency. Eight Democratic lawmakers, including Sen. Elizabeth Warren of Massachusetts, wrote in a February 2023 letter to DOE and EPA that a mandatory disclosure regime is critical. That letter predated the EIAs survey request.
Every day is urgent, said Mandy DeRoche, a deputy managing attorney of the clean energy program at the environmental group Earthjustice. The incentives for mining are getting so much higher. Between the price of bitcoin and extreme weather, the combination is a danger to our grid and a danger to externalizing costs on other ratepayers and on the environment.
But even some in the industry say more transparency around electricity is necessary and could help miners play a key role in protecting the grid. Cryptocurrency miners can soak up excess electricity and can ramp down quickly to reduce demand at times when the grid is at risk.
We want to supply some of this information, especially about how the industry can curtail and actually benefit grid reliability, said Tom Mapes, president of the Digital Energy Council, which advocates for cryptocurrency mining. Theres an opportunity for us to show how we can be flexible.
The EIAs request seemed simple: Have 82 mining companies report the electricity used at their 150 mining facilities, as well as the electricity sources they rely on.
It was made in January under an emergency order approved by the White House, with EIA Administrator Joe DeCarolis saying the industrys rapid growth and existing strain on the grid created heightened uncertainty for power markets.
The industry, however, protested. A lawsuit filed by the nonprofit Texas Blockchain Council and Riot Platforms, a large mining company, said the agency had not properly sought public comment and wouldnt commit to protecting proprietary information. They charged that the legally defective survey would pose a risk to their operations.
Thats in line with comments Riot made in a February filing to the Securities and Exchange Commission, where the company warned that bitcoin mining will be a focus for potential increased regulation in the near- and long-term.
The company added that it was possible the planned EIA survey or similar data collection would be used to generate negative reports regarding the Bitcoin mining industrys use of power and other resources, which could spur additional negative public sentiment and adverse legislative and regulatory action against us or the Bitcoin mining industry as a whole.
An agreement with the companies resulted in EIAs move to pull the emergency survey and committing to seek public comment before launching another survey. EIA spokesperson Chris Higginbotham said last month that there was no update on the timing of the survey.
Other grid watchdogs are also closely watching how cryptocurrency grows. In its 2023 Long-Term Reliability Assessment, the North American Electricity Reliability Corp. wrote that the unique characteristics of cryptocurrency mining mean that potential growth can have a significant effect on demand and resource projections as well as system operations.
The watchdog organization said it had not previously covered cryptocurrency in its long-term projections but that the industry could impact load forecasting methods because of its flexibility.
Wood Mackenzies Hertz-Shargel also said it would be important to know how mines work on an hourly basis in response to fluctuating power prices or other factors that regulators may not have considered. Spikes at certain times of day, for example, could mean utilities have to plan different power sources or anticipate systemwide peaks at unusual times.
Thats different from data centers or certain industrial users, which typically run 24 hours a day on end and arent in a position to turn up or down based on grid demands. Many data centers are also backed by large technology companies that have their own internal climate goals and have the financing to link their operations to new renewable energy projects.
Crypto companies, which are newer and whose profitability fluctuates based on the currency, typically dont have the same heft as those tech giants to establish their own renewable power and are left to pull electricity from the grid.
The EIA does survey data centers as part of the Commercial Buildings Energy Consumption Survey, which was last conducted in 2018. Although the data collection allowed EIA to assess how it could publish data center estimates, that survey did not separate out data center use as a separate building type because of a small sample size and low cooperation rate, Higginbotham said.
Accessing crypto data typically means going through filings for companies that are publicly traded or relying on voluntary disclosures. Elliot David, head of climate strategy and partnerships for the Sustainable Bitcoin Protocol, is also working to have miners communicate their energy use and rely more on renewable power where available.
The level of transparency really varies, said David. Its hard to contextualize energy consumption sometimes because theres a whole chain of energy and digital asset structure that needs to be factored in.
Despite the Texas Blockchain Associations role in fighting the EIA survey, the Lone Star State may actually have the most insight into the industry. A 2023 law requires cryptocurrency miners above a certain size to register with the state and disclose their anticipated load to the Electric Reliability Council of Texas (ERCOT), the grid operator for most of the state.
Texas Blockchain Council President Lee Bratcher said in an email that ERCOT can view nuanced and minute by minute energy consumption data for bitcoin miners in Texas. This is essential for grid operations and bitcoin miners are proud to be the most flexible load on the grid.
ERCOT has a large flexible load taskforce to track their impact on the grid and work on ways to better integrate them into the grid.
In a statement, ERCOT said that the grid operator is looking at variables including outside factors tied to global economics that impact the supply and demand curve and in turn the overall cost of electricity and cost to the consumer.
Instances where mines unexpectedly disconnect or display inconsistent behavior during resource scarcity events could represent risks to grid reliability.
Some groups supportive of the EIA survey say the agency was off base in the haste with which it sought the data. The agency said the quick rise in bitcoin and the threat of grid stress during cold weather made it imperative.
Mapes of the Digital Energy Council, who formerly worked at DOE, said he could see that some members might feel unfairly singled out by the rushed process and that it is important to not just cherry-pick certain data points.
The fact that the Biden administration has proposed a 30 percent tax on the electricity used by cryptocurrency miners, including in its most recent budget request, adds to the concerns that the industry could be unfairly targeted.
Groups had also raised concerns about the EIA collecting information on machine types, locations of data centers and energy contracts.
Instead, Mapes said, the industry could tell a compelling story about its unique role in grid planning. Mines can support renewable energy, he said, by soaking up energy that might otherwise be curtailed or by locating with large new energy developments. And by ramping up and down, he said, the projects can help ensure stability on the grid.
A responsible partner could even sacrifice mining at a time when prices are high to accommodate a request to cut back on load, according to Mapes.
Depending on the utility and service area, miners may also be compensated for reducing their load.
Isaac Holyoak, chief communications officer for the Nevada-based cryptocurrency firm CleanSpark, said the company emphasizes open communication with utilities and power providers. CleanSpark, he said, targets communities that have excess energy and then seeks contracts that allow utilities to call on them to curtail it during times of need.
Those instances, he said, are generally infrequent, often representing just a few hours during a year.
Transparency is the most important thing, Holyoak said. Our customers are the utilities. We want a mutually beneficial relationship so we both get something out of it.
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Unsolved mystery: How much power is crypto using? - E&E News by POLITICO
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Westlake convenience store owner helps thwart crypto scam – WKYC.com
Police are cautioning the public to 'talk to your older relatives and neighbors about scams as they are often the targeted population.'
CLEVELAND After the owner of a Westlake convenience store helped thwart an alleged attempted cryptocurrency con involving an elderly near-victim, police are advising the public on warning signs to avoid scams.
Westlake police say on Thursday, April 4, a convenience store owner became concerned after seeing an "older gentleman" depositing large amounts of cash into a cryptocurrency ATM in the store. Police say the man was being instructed on what to do by someone over the phone.
"Knowing that these were signs that a scam was underway, WPD detectives responded to attempt to stop the theft," the WPD said in a news release. "Luckily the officers were able to stop the crypto-currency transaction before it was finalized and funds passed to the perpetrators."
According to police, the man had been targeted with a pop-up on his home computer saying that his computer had been "compromised."
Police said the scammers tried to scare the man into transferring the funds by falsely telling him that criminals had traded in child porn on his computer and that he would be implicated if he did not pay the scammers to "clean up" the device.
The WPD is highlighting the attempted scam to caution the public to talk to older relatives and neighbors about how to spot a scam, noting that seniors are often the targeted population of fraudulent activity.
"Do not call phone numbers on unexpected pop-ups on computers, or unexpected emails, texts or phone calls," the WPD says. "If someone is instructing you to buy gift cards to pay for debts, warrants or computer support it is a scam. If someone instructs you to keep them on the phone when you go to the bank to withdraw cash or when depositing funds in a Crypto-ATM, IT IS A SCAM!"
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Dogecoin Co-Creator Billy Markus Sarcastically Signals Caution Amid Cryptocurrency Market Crash: ‘Oh No Everything … – Investing.com UK
Benzinga - by Bibhu Pattnaik, Benzinga Staff Writer.
In the wake of a significant downturn in the cryptocurrency market on Friday, Billy Markus, the co-founder of Dogecoin (CRYPTO: DOGE), shared an unusual statement on X, formerly known as Twitter, about the meme currency.
On a day marked by widespread losses across major cryptocurrencies, including Bitcoin (CRYPTO: BTC), Ethereum (CRYPTO: ETH), and Dogecoin itself, Markus playful commentary stood out amidst the sea of red.
Following a sharp decline, Dogecoin plummeted by over 19%. Markus shared a sarcastic tweet that garnered supportive reactions from the DOGE community on Friday, "Oh no, everything died; we are dead."
Also Read: This Analyst Says Dogecoin Could Rally Further Following An Elon Musk-Induced Rally But There's A Catch
The total liquidations in the cryptocurrency market within 24 hours reached approximately $735 million.
The recent market correction occurred less than a week before the anticipated fourth Bitcoin halving scheduled for April 21, which will reduce the reward for mining a new block by half to 3.125 BTC.
This event, expected to happen once every four years, is closely watched by the community. Many anticipate a potential surge in Bitcoin's price and a ripple effect on altcoins, including Dogecoin.
Now Read: As Dogecoin Jumps 18%, Founder Billy Markus Cracks Joke About Crypto Community: 'If You Take Offense To This ...'
Photo: Shutterstock
2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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