These are the top U.S. states for Bitcoin mining – Fortune

These are the top U.S. states for Bitcoin mining – Fortune

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As Bitcoin miners flock to the United States, both politicians and environmental advocates warn of the ecological costs of the energy-intensive industry. In September, the White House released a report citing that the U.S. hosts about a third of the world’s crypto mining operations, consuming up to 1.7% of the nation’s electricity, equivalent to all residential lighting.

A new study by researchers at Cornell University argues that environmental concerns can be assuaged by more efficiently distributing Bitcoin mining in states that prioritize renewable energy and have lower operational costs, potentially mitigating damage.

As electrical grids ramp up usage of renewable energy sources like solar and wind, and closely explore carbon capture technology, Bitcoin mining can become more sustainable at an accelerated pace.

Dr. Fengqi You, a professor of energy systems engineering, spearheaded the research in the hope of driving better public policy tied to mining operations.

“As more of these mining facilities are coming to the U.S., and more of the public is thinking about investing in these sectors,” he said, “what are the consequences to the climate and to our energy systems?” 

Bitcoin uses a proof-of-work consensus mechanism: For transactions in the public ledger known as a blockchain to be recorded, different people—or miners—race to solve complex algorithms. The winner validates the block and is rewarded with Bitcoin.

The process requires immense computing power, with energy consumption equivalent to the demands of countries such as Finland. It also results in massive carbon emissions—an estimated 90.76 million tons annually, comparable to the carbon footprint of Greece.

In recent years, operations have moved to the U.S. as previous hubs such as China have banned Bitcoin mining. They’ve become concentrated in Texas, with its deregulated energy grid, as well as in New York. Respectively, the two states account for 14% and 19.9% of Bitcoin’s computing power within the United States.

The study from Cornell found that the current distribution of mining operations in the United States doesn’t make sense from either a cost or emissions standpoint.

“Every state has its own electricity mix,” You told Fortune. Some states have higher reliance on hydropower, others on nuclear or natural gas.

When his team looked at total costs for mining operations in different states, including capital expenditure and operating expenses, they found a strong correlation between using clean energy and lowering project costs, which You said was surprising because renewables are often considered comparatively expensive.

Moving forward, he said it will be critical to move mining operations to locations with better renewable capabilities, not just from an environmental standpoint, but also an economic one.

While the map above shows the best states for the near term—with places like Washington and New York as top candidates—they also conducted an analysis of how the picture might change with increased policy support for renewable energy. In that scenario, states including Vermont and Oregon become more favorable. Texas, You added, isn’t the best or the worst choice because of its relative carbon emissions associated with its electrical grid.

While the study doesn’t endorse Bitcoin mining, it recognizes that it’s likely here to stay—and operations can be optimized to decrease carbon emissions and lower costs.

“Ideally, if they’re going to use only renewables for mining Bitcoin, then we could argue they will not have any influence on the climate,” You said. “But in practice, of course, we know that we are not yet at the stage of a 100% renewable energy grid.”

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