WASHINGTON—Blockchain technology could make the U.S. more energy efficient in the long run, but right now the cryptocurrency miners using blockchain actually are consuming large amounts electricity to power their computers and other devices, experts told a Senate committee on Tuesday.
In the central and eastern area of Washington state, the inexpensive hydropower has attracted many cryptocurrency miners, which has driven up electricity fees in the area, said Washington Sen. Maria Cantwell, the top Democrat on the Energy and Natural Resources Committee.
The worldwide energy usage for bitcoin, a popular cryptocurrency, is estimated to be around 2 billion to 3 billion watts of power, which is the equivalent amount of energy used by 2 million homes, said Tomas Golden, program manager at the Electric Power Research Institute.
Cryptocurrency is an application that uses blockchain technology, which is open to anyone but requires volunteers to consistently solve complex digital puzzles to support new blocks added to the chain. The process is called “mining,” and the volunteers are called “miners.” The volunteers are rewarded with small amounts of cryptocurrency.
Miners require an increasing amount of computing power and energy to compete with each other, said Paul Skare, chief cybersecurity manager at Pacific Northwest National Laboratory.
“The energy used in cryptocurrency mining has been compared to the total energy usage of states, and even countries,” Skare said.
Recognizing that the mining process is unlikely to be abandoned, Princeton University Associate Professor Arvind Narayanan said that energy experts and computer scientists should work together to create efficient energy solutions.
Claire Henly, managing director at the Energy Web Foundation, said the government should develop an incentive policy to discourage miners to mine during peak times to relieve the supply-demand tension.
But blockchain technology also has the potential to help the clean energy industry. Cantwell said peer-to-peer energy transactions in blockchain allow customers to purchase and sell electricity, driving down the cost by allowing people to use their distributed energy.
Henly said Energy Web Foundation had assembled a group of 80 energy companies to develop and deploy an open-source blockchain, which is less energy demanding.
A recent report by the Energy Future initiative estimates global investment in digital power sector infrastructure has increased 20 percent since 2014, reaching $47 billion, according to Sen. Lisa Murkowski, R-Alaska, the chairwoman of the Senate energy committee.