As a seasoned researcher with a keen interest in the intersection of technology and sustainability, I’ve witnessed firsthand how Bitcoin mining has become a double-edged sword. On one hand, it represents a groundbreaking innovation in digital currency; on the other, its energy consumption is alarming, particularly when it comes at the expense of local electricity grids.
Mining Bitcoins, an intricate process involving the addition of data to the blockchain, has sparked concerns. Although it can be financially rewarding for certain individuals, it strains the local power grid.
Approximately one digital coin may require as much as 155,000 kilowatt-hours (kWh) of electricity just for mining, while each transaction uses roughly 851 kWh – about the same amount of energy consumed by an average American household over a full month.
Bitcoin mining’s threat is global, with many national and local economies feeling the pinch. For example, Tenaga Nasional Berhad, Malaysia’s national electricity provider, has reported losses of more than 440 million Ringgit (about $101 million) due to mining-related electricity theft. This figure is on top of the reported confiscation of electrical items related to Bitcoin mining valued at $500,000.
Local Reports Say Theft Has Affected TNB For Years
A report in The Star indicates that Tenaga Nasional Berhad has experienced financial losses due to Bitcoin mining-related thefts since 2020, as stated by Commissioner Datuk Seri Mohd Shuhaily Mohd Zain. He mentioned that the company’s yearly losses have been rising steadily.
In 2020, the company suffered a loss of approximately RM5.9 million. The next year, this figure skyrocketed to RM140.4 million. Unfortunately, in 2022, the losses escalated even more to RM124.9 million. The following year saw a slight decrease to RM67.1 million. This year, the losses have reached RM103 million and continue to climb.
Bitcoin Mining Continues To Impact Local Supply
As an analyst, I’ve uncovered evidence suggesting that significant financial losses for TNB can be traced back to the year 2018. These losses are allegedly linked to clandestine mining activities. In a separate report, TNB has disclosed that the accumulated damages from 2018 up until 2023 surpassed a staggering $755 million.
Although crypto mining only accounts for a small portion of Malaysia’s total consumption, it has a substantial financial impact. Aside from TNB’s losses, over $500,000 of electrical equipment linked to illicit mining operations have been confiscated.
As a researcher, I am privy to the fact that the government’s confiscation of these electronic devices forms an integral part of Malaysia’s broader initiative against tax evasion, particularly in relation to parties associated with cryptocurrencies. The Criminal Investigation Unit within Malaysia is currently gearing up to delve into the intricacies of these thefts and identify underlying factors that seem to be fueling the escalating trend of such losses.
How Does Bitcoin Mining Affect Electric Companies?
Mining Bitcoin is a complicated process where individuals or companies work to add fresh data to the blockchain network. However, this activity consumes substantial amounts of energy. To obtain Bitcoins, one needs to solve intricate mathematical problems. Essentially, this process is likened to “digging” for Bitcoin.
Yet, it’s worth noting that this process is typically demanding in terms of computational resources and energy consumption. In nations such as Malaysia, the significant electrical demand often leads some individuals to evade payments or engage in illicit activities due to the high cost of electricity.
Featured image created using Dall.E, chart from TradingView
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2024-10-27 10:11