With the recent regulation in the crypto sector, several states have introduced crypto-mining fees. This is due to the high amount of power consumed by crypto miners.
In the western part of the United States is Washington. Most of the state’s electricity is provided by hydroelectric power. The state has increased mining fees to reduce the power consumed by crypto miners.
Currently, the mining fees for BTC miners have increased by 29%. Gary Arsenault, Chelan county’s Public Utility District (PUD) commissioner, commissioned the increment. The new increment became effective from the 1st of June, 2022.
The New Increment Is To Increase Business Income And Meet Demand
At the moment, it appears that hydroelectric power is no longer affordable as it used to be. However, Ann Congdon, a PUD commissioner, noted that this increment is important for the sector.
Congdon believes this Will allow it to develop and expand to match demand. Meanwhile, Congdon noted that the new rate allows business planning.
On the other hand, Arsenault gave a reason in the discussion with the KPQ channel. He noted that the demand for power utility had increased recently. Hence, the rate was increased to meet the high electricity demand.
Furthermore, Washington has a power plant that produces 6,809MW of hydroelectricity. This accounts for two-thirds of the entire electricity produced in the US in 2020. Also, it is the 7th largest power plant worldwide.
Before now, Washington was a mining hub for crypto miners due to its cheap power. With the recent regulation in the state, Bitcoin miners may have to relocate. This is because crypto miners now have to pay a fee called the Rate 36.
Electricity Consumption Of Bitcoin Mining
It is noteworthy to say that not all digital currencies need mining. Meanwhile, the consensus mechanism behind Bitcoin and some others need mining. However, this BTC mining consumes much electricity and is not environmentally friendly.
Meanwhile, The Cambridge Bitcoin Electricity Consumption Index estimates BTC’s energy consumption. The index estimates that Bitcoin used over 167.72 TWh of electricity during production. Also, it uses an estimate of 26.73 TWh per year.
Looking at these figures, it is above the annual electricity consumption of several countries. For instance, the Netherlands, Argentina, and the UAE used less energy in 2020.
Currently, there is no accurate method for calculating the power used for BTC mining. At the moment, calculations are made from gross estimations. This is done by calculating mining rigs’ network hash rate and energy consumed.