Traditionally, Kentucky has been known for its coal mines. Recently, the US government is working on a new type of mining: bitcoin mining. It Mine Among cryptocurrencies, it has recently grown into a significant industry: Kentucky ranks second in the United States after New York.
Mining, or ‘digging’ cryptocurrencies, is a computerized process that requires a great deal of energy. And these should be kept in reserve near old coal power plants. These power plants have been removed at a steady pace in recent years, and many energy companies have switched to renewable energy, and fossil energy is making less profit. But there are more and more reports from the United States about the almost-defunct fossil plants that are getting a second life as a special power provider for bitcoin miners.
Such as the coal-fired power station at Greenidge, New York, Dresden. It went out of business in 2011. A few years later, it was re-launched by an investment fund that converted the power plant to gas and is now using its full potential. Mine Bitcoins. In 2020, the equivalent of annual CO2Emissions into the air from 50,000 cars.
In the state of Montana, Hardin’s coal-fired power plant is almost bankrupt due to lack of demand. It was supposed to close in 2018, stumbled for a while, but was in operation for less than fifty days in 2020. Until Bitcoin’s marathon builds a data center next to it, the coal-fired power plant went back into production. By 2021, the power plant was spinning again almost every day, and CO2Emissions are nine times higher than the previous year.
The function of attracting energy
U.S. states are even competing to bring in energy-intensive businesses. Kentucky passes legislation granting tax breaks to crypto miners. Bitcoin company Blackware is currently developing a large data center next to an energy company that will gradually shut down its coal-fired power plants that were previously in the news. But that scene seems to have changed.
Faced with criticism of the impact on the environment, many companies claim to reduce their CO2Compensates for emissions. Or that field uses x or y more energy. Or they have turned to green energy to some extent. But environmentalists object that Bitcoin’s largest cryptocurrencies use large amounts of energy. Thousands of computers simultaneously verify a transaction. This is the cost of energy not used for other tariff transactions.
Currently, half of the world’s electricity is used to ‘run’ cryptocurrencies; Bitcoin alone consumes more electricity each year than all citizens and companies in the Netherlands. As more and more people engage in crypto, that energy demand will increase (see box).
The benefits against it are controversial. Activists hope to seize power from crypto governments and central banks and democratize money transactions. Skeptics point out that the price of Bitcoin is so volatile that it can never become a serious currency. That price also follows the stock market, and that crypto is essentially a speculative bubble that will burst again sooner or later.
Last year the largest power consumption by cryptocurrencies was enough for China. It simply banned them, until then two-thirds of the world’s bitcoins had been mined in that country. Since then, miners have been looking for new home ports. Kazakhstan is one of the countries where many miners have started since then, but the biggest growth is in the United States. Two years ago, only 3 percent of the total bitcoin was hacked there, and now it is more than 35 percent.
Some smaller countries have recently followed in China’s footsteps. Last month, Kosovo banned the mining of cryptocurrencies because of the high load on the power grid.
Why does crypto mining take so much energy?
Cryptocurrencies are electronic currencies that are not guaranteed by any country or central bank, but are administered extensively by a network of users. What really happens when someone mines or ‘digs’ bitcoins is that they make computer resources available to the network to record the transactions within that network. Compensation in return includes new bitcoins.
Now the bookbars themselves should not expend too much power, but the system has built-in protection against malicious transactions being damaged. Computers posing as ‘miners’ must first participate in a kind of digital guessing game in which tasks are roughly distributed among participants, and fraud becomes more difficult. But with more computers in the network, digital guessing games will become more sophisticated, and bitcoin ‘digging’ more powerful.
Ten years ago, when you left the PC at your desk for an hour while you were shopping and came home, you had bitcoin. Today, such bitcoin excavation requires a large data center and consumes more electricity than the average family in ten years.
Anyone who evades taxes with cryptocurrencies should update their notifications soon
Lawyers are advising clients who keep bitcoins secret to improve old tax returns. Tax authorities can quickly verify if anyone has cryptocurrencies.
“Award-winning beer geek. Extreme coffeeaholic. Introvert. Avid travel specialist. Hipster-friendly communicator.”