One of the things that make cryptocurrencies a unique technological feature is its ability to confirm transactions without the need for a third party. Instead, blockchain technology makes use of miners in order to confirm transactions.
But the thing is, mining is also a tricky topic. To give you an idea just how much energy is needed in order to cover for all Bitcoin transactions, Bitcoin mining requires 54 terawatts of energy per year. Entire Israel makes use of 56 terawatts of energy per year.
Moratorium on Bitcoin Mining?
One small manufacturing town in New York has been considering an 18-month halt on new commercial Bitcoin and other cryptocurrency mining.
According to Plattsburgh, New York mayor Colin Read, he proposed to ban mining within the town simply due to the simplest reason: massive energy consumption.
Given the computing power that is required to confirm transactions, cryptocurrency mining saps around 10% of Plattsburgh’s monthly energy supply. Plattsburgh has been an ideal candidate for cryptocurrency mining for the reason that it receives discounted rates due to long-standing contracts. However, cheap electricity does have a limit. Crypto mining now requires the town to purchase energy that costs 100 times higher.
Bitcoin and other cryptocurrency miners that have managed to set up in Plattsburgh consume around the same amount of energy as local plastic manufacturers. However, plastic plants employ around 200 people while mining can be operated only by one person.
The thing with cryptocurrency mining is that the required amount of energy needed to run its operations also grows as the price of cryptocurrencies rises. Miners will eventually use more energy as the number of bitcoins decrease. So far, there are still 20% of the 21 million bitcoins that are up for grab for miners. However, it would require more energy in the future as getting bitcoin becomes even more difficult for computers.
Iceland is among the places that have become a favorite location for crypto miners. It is an ideal location mainly for its cold weather which can help keep the servers cool. However, these operations sap more energy than all homes in the country.
Bad For Businesses?
Sadly, mining can affect other businesses. This could ultimately require towns to buy energy that is much more expensive. And in the end, businesses will have to pay more for electricity due to the massive consumption of mining operations. However, despite the drawbacks, there are only a few cities that have banned mining. The city council of Chelan, Washington, announced that it would ban cryptocurrency mining for six months in residential areas mainly for power concerns and safety reasons.
A Good or a Bad Move?
David Bowman, who is a crypto miner in Plattsburgh, argues that it will be a terrible mistake to ban cryptocurrency mining operations. He mentioned on Vice that “It’s basically in the early stages of development like the Internet was”. He added that “In my view, an outright moratorium would hurt the city more in the long run because it would miss out on all that”.