Riding The Wave News Summary 215
US crypto miners challenge EIA’s energy usage survey, Chinese Bitcoin Miners Find a New Crypto Haven in Ethiopia, & more.
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US crypto miners challenge EIA’s energy usage survey
Key figures representing United States-based cryptocurrency mining have raised red flags over an emergency survey to garner information on energy consumption and sources by operators.
Cointelegraph reached out to key mining firms operating in the country following the U.S. Energy Information Administration’s (EIA) announcement that it would carry out a provisional, mandatory survey to measure the electricity usage of local mining firms.
The Department of Energy’s statistics agency received approval for its “emergency request” to collect data in January 2024. The administration previously told Cointelegraph that it aims to develop a “baseline snapshot,” identifying electricity sources for U.S. cryptocurrency miners and singling out regions with concentrated mining activity.
Several mining firms and organizations representing the broader blockchain industry have raised red flags over the legality of the approach and questioned why government-run institutions are targeting the cryptocurrency mining industry.
Texas Blockchain Council (TBC) president Lee Bratcher hit out at the “unprecedented information collection request” and said the situation should be cause for concern for industries relying on data centers as part of their operations:
“The EIA’s mandatory emergency survey of electricity consumption data represents the latest politically motivated campaign against Bitcoin mining, cryptocurrency, and U.S.-led innovation.”
A spokesperson from Riot Blockchain reiterated Bratcher’s sentiments, telling Cointelegraph that the EIA’s request is unlawful and that the company is exploring its legal options:
“We question how a survey can be considered an emergency and why this emergency only targets Bitcoin miners. On its face, this appears to be an attempt to avoid administrative procedure, including public notice and a comment period, in service of a political agenda.”
Commentators have also questioned why the EIA has not imposed similar mandatory data collection measures on other industries in the U.S. that demand large amounts of energy.
SunnySide CEO Taras Kulyk, whose company provides hardware and infrastructure to Bitcoin mining firms, including Iris Energy, CleanSpark, Cathedra and Bitfarms, told Cointelegraph that a pressing concern is the lack of context of the collection’s intent and why the digital mining sector is being singled out.
“Many industries utilize vast amounts of electricity in going concern operations. The fact this is targeting our sector screams to be another political attack when Congress and the White House have many bigger issues to tackle,” Kulyk said.
Chinese Bitcoin Miners Find a New Crypto Haven in Ethiopia
Last spring, cargo containers began appearing near electricity substations connected to the recently built Grand Ethiopian Renaissance Dam, Africa’s largest. Inside were stacks of powerful, energy-guzzling computers.
It was a telltale sign that Chinese Bitcoin miners, having bounced from country to country in search of cheap power and benign regulations since Beijing cast them out two years before, had arrived in the Horn of Africa.
Buffeted by political and economic headwinds, they were lured by some of the world’s lowest electricity costs — as well as an increasingly friendly government. Ethiopia, which allowed Bitcoin mining starting in 2022 even though it still bans cryptocurrency trading, has bolstered ties with China over the past decade, and several Chinese companies helped build the $4.8 billion dam the miners plan to draw their power from.
Ethiopia has emerged as a rare opportunity for all firms that mine the original cryptocurrency, as climate change and power scarcity fuel a backlash against the $16 billion-a-year industry (at Bitcoin’s current price) elsewhere. But it holds special appeal for Chinese companies, which once dominated Bitcoin mining but have struggled to compete with local rivals in Texas, the current hub.
It is also a risky gamble, for the companies and Ethiopia alike. A succession of developing countries like Kazakhstan and Iran initially embraced Bitcoin mining, only to turn on the sector when its energy use threatened to fuel domestic discontent. China’s reign as the epicenter of Bitcoin mining came to an abrupt end in 2021, when the government banned it. Dozens of companies were forced to leave.
The reliance on abundant power is also a major vulnerability because it can put miners in competition for electricity with factories and households, exposing them to political backlash.
When Kazakzstan imposed fresh curbs and taxes on miners, “it basically killed the industry,” said Hashlabs co-founder Alen Makhmetov. Two years after the clampdown, his 10-megawatt facility there is still sitting idle.
Bitcoin Tops $44K, With Whale Accumulation Suggesting Conviction in More Price Gains
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