The terms are reminiscent of times gone by: Mining, power plant, marketplace. However, bitcoin mining no longer has much to do with the original energy supply. Only the place of action remains something that practically everyone can imagine. Because for the prospecting of the cryptocurrency it needs a lot of computing power and therefore a lot of electricity. According to a report by the “Cambridge Bitcoin Electricity Consumption Index,” Bitcoin production requires about 115 terawatt-hours annually. By comparison, gross electricity consumption in Germany averages between 500 and 600 terawatt hours, according to the Federal Statistical Office.
So, in order to make bitcoin production as cost-effective as possible, companies usually opt for power plants in countries with low energy prices. For a long time, China was therefore the market leader in Bitcoin production. In September, however, the government there imposed a ban on all Bitcoin transactions. Due to this so-called “China crackdown”, many companies recently switched to the USA for power generation. There, not only are the electricity prices favorable, but the companies can also count on approximate political stability.
Atlas Holding has therefore recently become particularly prominent in the Bitcoin business. Ten years ago, the company bought the insolvent Greenidge Generation coal-fired power plant in order to improve its eco-balance. With the help of government subsidies, Atlas converted the plant into a natural gas power plant with fracking technology. The only difference is that the region around the power plant already meets all of its energy needs. The energy produced from the Greenidge Generation will therefore be used for a bitcoin mining farm by Atlas. Between 2020 and 2021 alone, more than 1000 Bitcoins are to have been mined in the process. At a current Bitcoin price of around 55,000 euros, the holding company has generated several million in revenue. Environmentalists criticize this.
While worldwide efforts are being made to reduce CO2 emissions, a power plant here produce additional energy that is not needed. In addition, Atlas Holding’s power plant uses cooling water from the nearby lake and then feeds it back into a river in heated form. The company claims that the plant is climate-neutral. However, this is only achieved by trading CO2 certificates.
But Atlas Holding is not the only company that buys up out-of-touch power plants for its bitcoin mining. Stronghold Digital Mining had also bought a coal-fired power plant in Pennsylvania a few weeks ago with the same goal. Here, they even continue to burn coal to mine the cryptocurrency.
Following the events surrounding Greenidge Generation, calls are now being made for New York State Governor Kathleen Hochul not to renew permits for such power plants. She also said that the emergence of new “crypto power plants” should be prevented. Most recently, Tesla CEO Elon Musk had criticized them and spoken out in favor of CO2-neutral production in the crypto-mining sector.