Cryptocurrency

Cryptocurrency: Our Newest Energy Foe

by Katy Spence

There’s a new energy guzzler in town, and its name is “cryptocurrency.” That town, however, cannot be in Missoula County, Montana.

Cryptocurrency is a virtual currency that only exists as computer code. Popular cryptocurrencies include Bitcoin and Ethereum, which have seen exponential growth in the last 10 years. In just one year, the combined value of all cryptocurrencies in the world increased from $250 billion in Jan. 2020 to $1 trillion this past January.

With every get-rich-quick scheme, however, there’s a downside. With cryptocurrency, it’s the outrageous amount of electricity that certain facilities use.

Through a process called “mining,” users can sometimes earn cryptocurrency without having to buy it. Huge facilities are dedicated to mining, and the process is incredibly energy intensive. Current estimates suggest that cryptocurrency mining globally consumes more than 100 terawatt-hours of electricity a year, which is comparable to energy consumption of entire nations, such as the Norway or Argentina.

Missoula County has been debating cryptocurrency facilities for years. In early Feb. 2021, the Missoula County Commission unanimously adopted permanent zoning that regulates where cryptocurrency mining operations can be located and how those facilities are powered.

If someone wants to open a cryptocurrency mining facility in Missoula County, thefacilities must either purchase or develop enough new renewable energy to offset 100% of their electricity consumption, according to the Missoula Current. The facility must also dispose of all its e-waste through a Montana DEQcertified e-waste recycling program.

Missoula County cited the “grotesque” amount of energy needed for a cryptocurrency mining operation and an imperative to address the climate crisis as reasons for these regulations.

Not all of Montana is free of the effects of cryptocurrency. In late 2020, Marathon Patent Group announced its plan to build a Bitcoin mining facility, which will draw its electricity from the coal-fired Hardin power plant in Big Horn County. While some cryptocurrency operations are moving to more renewable and green energies, the appeal of cheap coal-fired electricity remains, as it will increase the profit of crypto miners. MEIC is closely monitoring the cryptocurrency trend in our state, and pushing for operations to adopt energy standards like those in Missoula County.

The amount of energy used by Bitcoin mining is comparable to that of entire countries. Graph from BBC.