Cryptocurrency miners are taking a toll on power grids worldwide — Russia and Belarus join other countries look to separate them from other power users

Cryptocurrency miners are taking a toll on power grids worldwide — Russia and Belarus join other countries look to separate them from other power users
Mining for cryptocurrencies is taking a toll on power grids worldwideCanva
  • Belarus and Russia want to separate cryptocurrency miners from other power users.
  • According to the head of Russia’s Ministry for Energy, “It is necessary to exclude the possibility of electricity consumption by miners at tariffs for the population.”
  • Other countries like Kazakhstan and Iran are also in the process of putting in exclusive regulations for cryptocurrency miners to ease pressures on their respective power grids.
Belarus and Russia are looking to separate cryptocurrency miners from other power users. And, they’re not alone. The energy consumed while mining for cryptocurrencies has been a global concern for a while now — both in terms of the sheer amount consumed and its environmental impact.

"To maintain the reliability and quality of power supply, we believe it is necessary to exclude the possibility of electricity consumption by miners at tariffs for the population."

Nikolai Shulginov, the head of Russia’s Ministry of Energy, told reporters on the sidelines of Russian Energy Week

Countries around the world, especially those which serve as hubs for cryptocurrency miners, have been looking to regulate the activity and its electricity usage. China may not have been the first but it was the loudest on the scene when it banned cryptocurrency mining in the country altogether earlier this year. Power plants found to be providing electricity for such operations were warned that they may face fines or other legal penalties.

Chinese miners, on the other hand, have since found new homes — transferring the burden of electricity consumption from one country to others, like Kazakhstan, the US, and Russia.

Kazakhstan is rationing its electricity as miners cross the border from China

Kazakhstan, the prime location for Chinese miners since it’s located just across the border, is now the second-largest crypto miner in the world. According to data collected by Cambridge University, the country’s share in global mining went from 1.4% in September 2019 to over 18% as of August 2021.


But becoming the new hub of cryptocurrency mining has taken a toll on the country’s power grids. "We have seen that our [country's] electricity consumption has literally increased by 7 percent in one year. That's a very big increase," the country’s Energy Minister Magzum Mirzagaliyev told Kursiv — a local publication — noting that consumption usually grows by about 2% each year.

On October 15, the national grid operator, KEGOC, announced electricity rationing after three major coal-fired power plants shut down. While the operator did not directly blame cryptocurrency miners, it said that it was cutting off customers who “over-consume.”

Cryptocurrency mining in Iran led to a four-month ban

Iran banned cryptocurrency mining earlier this year — for four months — due to concerns over power outages amid the soaring summer temperatures. However, mining or not, the country often faces a shortage of electricity during the peak winter and summer months with temperatures going into the extremes.

While the country has since rolled back the restriction, it continues to struggle with unregulated cryptocurrency mining. Only 50 Bitcoin farming plants have a legal license to operate while 85% of mining operations in the country reportedly continue to be illegal.

Striving to find a workaround to electricity consumed by cryptocurrency mining

It’s not just governments who are concerned about the electricity consumption of cryptocurrency mining. Even Elon Musk, CEO of Tesla and SpaceX, announced that his electric car company will no longer be accepting Bitcoin as a payment method until its energy consumption drops by at least 50%.

Recently a cryptocurrency mining operation in New York resurrected a shut down fossil fuel power plate to power 15,300 of its servers to mine for Bitcoin. According to Greenidge Ridge, its strategy keeps from putting a toll on the public power grid.

However, environmentalists argue that this still does not address the underlying issue of unsustainable use. Using fossil fuel energy to create private profit may not affect the overall public supply of electricity, but is still harmful to the environment.

“The financiers of min­ing op­er­a­tions will in­sist on us­ing the cheap­est en­er­gy and so by de­f­i­n­i­tion it will be elec­tric­i­ty that has no bet­ter eco­nom­ic use.”

Excerpt from the Seetee research report by Aker ASA

According to a Seetee report by Norway-based Aker ASA, the ideal way to make cryptocurrency mining more eco-friendly is to support lawmakers that want to encourage mining in regions that already have underutilized energy sources.

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