High prices for bitcoin and other cryptocurrencies have led investors to revive US-closed coal-fired power plants.
The purpose of investors is none other than mining bitcoin which requires a lot of energy, but brings high profits.
In the US, the trend has been to shut down power plants that use fossil fuels such as coal or oil. But already in New York State, an inert coal-fired power plant has resumed operations, this time with natural gas, to extract cryptocurrencies. Another plant in Montana, which also used coal, is being renovated for the same purpose.
In order for bitcoin’s decentralised network to operate safely, mining is based on solving complex problems by computers, while those who run this process are paid with bitcoin. The higher the price of bitcoin, the more miners compete for mining and the higher the energy consumption.
The University of Cambridge estimates the annual energy consumption for bitcoin mining at about 130 terawatt, more than three times as much as at the beginning of 2019. This amount is greater than Argentina’s energy consumption.
The Hardin power plant in Montana has been in trouble for many years. In late 2020, cryptocurrency mining company Marathon Digital Holdings, listed on the Nasdaq, partnered with Hardin’s owner to transform the plant into a bitcoin hub.
It is noted that the high energy consumption for bitcoin mining was also the reason why Elon Musk announced last week that Tesla would no longer accept bitcoin as a means of payment, causing turmoil in the cryptocurrency market.
The price of bitcoin fell 31% to $30.000 last week and then rose to $40.000.