Proof-of-Work Cryptocurrency Mining: Environmental BOMB, Not Balm, for the Planet

Where are they?

Because the cryptocurrency mining industry lacks much, if any, standardized or centralized reporting of locations or energy consumption, this may be the most comprehensive view of the geography of the cryptomining industry available. While initially, it seemed likely that large-scale mining operations would be housed in retired power plants, these arrangements actually account for relatively few of the nearly 150 sites we have documented. Locations are often not revealed by companies, frequently couched under benign references to “datacenters,” tucked into existing or shuttered industrial facilities, or in specialized mobile trailer units. Sometimes we learn of them when they are mentioned by local media, industry press releases, permit applications, or complex Securities and Exchange Commission (SEC) filings. The map represents our collective efforts, to the best of our knowledge, of the locations of these mining facilities. Precise locations of facilities are included only when available through our investigations, and that level of accuracy is indicated in the pop-ups connected with each location on the map. Information on energy quantities consumed by these operations is often ambiguous or unavailable, so for consistency, we do not show that on the map. In addition, facility or company names may change subsequent to our collection of that information.

This search for all the cryptomining facilities in the US will never be complete; this industrial landscape is continually shifting as companies close, open, or uproot and move to areas of cheaper power. These expansions of the proof-of-work footprint put additional strain on the grid and on our environment as a whole, driving the argument towards more oil and gas drilling to power new or expanded power plants.

A slow-down?

In the weeks since the “Energy Bomb” report was released, there have been numerous interesting updates involving cryptocurrency.

Ethereum, one of the most popular proof-of-state cryptocurrencies outside of Bitcoin, switched its validation process from proof-of-work to proof-of-stake, dropping its energy consumption per transaction by more than 99.99%.  Prior to the switch from proof-of-work to proof-of-stake, Ethereum used 30,000 times more energy than it now does. This switch has enormous implications for the energy footprint about which cryptocurrency mining is most vociferously criticized. Please note that this is not an endorsement for or against Ethereum, and FracTracker does not provide investment recommendations.

The graph below, as of November 29, 2022, illustrates the switchover from POW to POS on September 15, 2022. That date is represented by the gray dot. Note that the value of Ethereum was not significantly impacted since the switch, although its environmental footprint shrank dramatically.