Government Legislation Alert: As Alarm Grows Over Crypto Mining’s Energy Use, Bitcoin Lobbyists Smuggle Government Accounts

Crypto mining raises electricity prices for everyone else

Crypto mining facilities often get discounted electricity rates while utilities can pay millions for upgrades to the grid to serve crypto mines. The utility may need to purchase additional electricity from the market, usually at a higher cost, when there may not be enough power generated locally to power crypto mines during peak times.

Crypto Mines’ incessant and damaging noise

Crypto mines create significant noise pollution that can seriously affect local residents and animals. Many crypto mines use high-speed fans to cool their computer banks, which create significant noise that can be heard for miles. The roar of fans has been compared to standing next to a jet, a moving motorcycle or a highway.

Crypto mines often promise jobs and economic development but fail to deliver

Crypto mines do not bring significant jobs to communities. These facilities require few employees to keep the machines running. Local communities often offer tax breaks or subsidies based on false or undocumented promises of economic development.

Communities foot the bill when relocating crypto mines

Communities can be left on the hook when relocating highly mobile crypto mines. Adding crypto mines to the network sometimes requires additional electrical infrastructure, but often nothing stops them from leaving an area if a cheaper opportunity arises somewhere else.

Crypto mining causes local air, climate and water pollution

Cryptomining that relies on burning fossil fuels for electricity, directly or indirectly, causes all the air and water pollution impacts of the underlying method of generating electricity. Exposure to air pollution, especially particulate matter, is estimated to cause 7 million premature deaths annually and lead to the loss of millions more healthy life years around the world. A study published last year found that Bitcoin mining alone has the potential to push the planet past the targets set by the Paris Agreement. Many crypto mining operations use massive amounts of water to power and/or cool their operations, often discharging warm water into local bodies of water, threatening aquatic life.

Crypto Mining generates enormous levels of electronic waste

Crypto mining results in enormous amounts of electronic waste. ASICs, the specialized machines used exclusively in the proof-of-work crypto-mining process, have a limited lifespan, and recent changes in the hardware (to mine faster) may increase machine turnover and thus the annual amount of electronic waste.

Satoshi Action Fund’s model bill would deliver special protections for crypto miners at our expense

The model legislation would prohibit state utility commissions from setting electricity rates for miners that differ from other industrial businesses. But by their own admission, crypto-miners behave very differently on the network than most industrial customers, shutting down suddenly, for example, but only when price signals – from electricity markets or crypto markets – are favorable to them. Almost every state already requires its utility commission to not unduly discriminate and set reasonable rates, to create a level playing field for all industries, including crypto mining. There is no need to change the law to favor crypto miners to the detriment of others.

Crypto miners have often found places to work where they can pay significantly less for their electricity than average ratepayers, be it residential, commercial or industrial. This is why crypto mining operations often open in states where they can get economic development discounts or subsidies and/or access to lucrative demand response payments. Establishing specific statutory language that is solely about protecting or privileging crypto miners is not fair, especially when crypto mining already imposes so many costs and burdens on others. In many places, cryptomining’s growth has been driven by state and local tax breaks, such as property tax reductions, refunds or exemptions from sales tax and franchise fees, income tax and payroll tax incentives, grants, loans and other incentives.

The model legislation would prohibit local noise and zoning ordinances. Communities should be able to protect themselves from crypto mining’s excessive, incessant noise. These bills will protect local communities’ right to ensure that cryptominers reduce unnecessary noise pollution.[1]

Utility and electric service providers must be able to protect the grid and other ratepayers from crypto mining’s immense energy needs and unique behavior. Before we encourage Bitcoin operations to spread and grant them special rights, we need to consider the impact on our communities, our networks and on our electricity rates.

[1] A 2024 New York Times article covered some of the consequences of passing a bill like this, which happened in Arkansas last year. This includes many angry communities, several lawsuits and attempts to repeal the law. Also see “Safe and Sound: How the Environmental Protection Agency Can Protect Us from Hazardous Noise” from the Center for Progressive Reform.