As Bitcoin’s price continues to rise, the U.S. government is concerned about the potential influx of new Bitcoin miners and its impact on electricity grids. To address this, the Biden Administration is implementing new reporting requirements for all U.S. cryptocurrency miners to disclose their electricity consumption data.
The “Emergency Survey” is the latest effort by the government to mitigate the environmental concerns associated with Bitcoin mining, which has faced criticism from Democrats for its environmental impact.
Starting next week, the Energy Information Administration (EIA) will conduct the survey, aiming to gather information from mining firms about the number of mining facilities they operate, their locations, and whether they use proof of work (POW) or proof of stake (POS) consensus mechanisms for cryptocurrencies.
EIA Administrator Joe DeCarolis stated, “We will specifically focus on how the energy demand for cryptocurrency mining is evolving, identify geographic areas of high growth, and quantify the sources of electricity used to meet cryptocurrency mining demand.”
Miners are required to submit monthly data, and failure to comply may result in criminal fines, civil penalties, and other sanctions.
The EIA justified the emergency status of the survey by citing Bitcoin’s 50% price increase in the last three months as evidence of potential rapid growth in the mining industry. Higher Bitcoin prices incentivize more mining activity, leading to increased electricity consumption.
Additionally, the EIA highlighted the current “cold snap” affecting the United States, which has raised electricity demand and stressed electrical grids. Bitcoin mining, combined with stressed electrical systems, could lead to demand peaks affecting system operations and consumer prices.
To address these concerns, some regions, like Texas, have established demand response programs with the mining industry. These programs require miners to power down their machines during grid stress periods while providing subsidies during off-peak times.
Regarding environmental issues, previous surveys have suggested that Bitcoin’s energy mix is over 50% green energy, making it one of the most sustainably powered industries globally.
The Biden administration previously attempted to impose a 30% tax on Bitcoin miners to discourage environmental harm, but the proposal was unsuccessful.