State Legislation Alert: As Alarm Grows Over Crypto Mining’s Energy Consumption, Bitcoin Lobbyists Peddle State Bills

Crypto Mining Drives Up Electricity Prices for Everyone Else

Crypto mining facilities often receive discounted electricity rates while utilities can pay millions for upgrades to the grid to serve crypto mines. The utility may need to buy 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 periods.

Crypto Mines’ Non-stop and Harmful Noise

Crypto mines create significant noise pollution that can severely impact local residents and animals. Many crypto mines use high-velocity fans to cool their banks of computers which creates significant noise, audible for miles. The roar of fans has been compared to standing next to a jet, a running motorcycle, or a highway.

Crypto Mines Often Promise Jobs and Economic Development, But Do Not Deliver

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

Communities Foot the Bill When Crypto Mines Relocate

Communities can be left footing the bill when highly-mobile crypto mines relocate. Adding crypto mines to the grid 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

Crypto mining that relies on burning fossil fuels for electricity, directly or indirectly, causes all of the air and water pollution impacts of the underlying method of generating electricity. Air pollution exposure, especially to particulate matter, is estimated to cause 7 million premature deaths annually and result in the loss of millions more healthy years of life 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 hot 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) potentially 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 ban state utility commissions from setting electricity rates for miners that are different from other industrial businesses. But by their own admission, crypto miners act very differently on the grid than most industrial customers, abruptly shutting down for instance, but only when price signals — from electricity markets or crypto markets — are favorable to them. Nearly 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 frequently found places to operate where they are able to pay significantly less for their electricity than average ratepayers, be they residential, commercial, or industrial. This is why crypto mining operations frequently 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 crypto mining’s growth was driven by state and local tax breaks, such as property tax abatements, sales-tax and franchise fee refunds or exemptions, incentives on income taxes and wage assessments, grants, loans, and other inducements.

The model legislation would prohibit local noise and zoning ordinances. Communities should be able to protect themselves from crypto mining’s excessive, non-stop noise. These bills would thwart local communities’ right to ensure crypto miners reduce unnecessary noise pollution.^[1]

Utilities and electric service providers must be able to protect the grid and other ratepayers from crypto mining’s immense energy demands and unique behavior. Before encouraging Bitcoin operations to proliferate and granting them special rights, we need to consider the impact on our communities, our grids, 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 last year in Arkansas. They include very angry communities, several lawsuits, and efforts to revoke the law. See also “Safe and Sound: How the Environmental Protection Agency Can Protect Us from Dangerous Noise” from the Center for Progressive Reform.