Cryptocurrencies: Bitcoin miners revive coal

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Coal-fired power plant in the US state of New York (archive image): surprising comeback

Photo: Ted Shaffrey/AP

The fate of Hardin's coal-fired power plant seemed sealed.

Environmentalists firmly expected that the reactor in the US state of Montana will be shut down.

After all, the 115-megawatt plant near the famous Little Big Horn battlefield had been losing money for years.

The power plant should have been taken off the grid as early as 2018 – but then an unexpected buyer was found for the dirty coal electricity: miners who mine bitcoins.

As the "Guardian" reports, the Bitcoin boom has given the power plant, which was said to be dead, a second life: In 2020, the American Bitcoin mining company called Marathon secured the electricity from Hardin and set up a data center with more than 30,000 near the power plant special computers.

The kiln is just one of numerous "zombie" coal-fired power plants that are being restarted in the course of the Bitcoin boom in the USA - the power plant in Dresden in the state of New York also supplies electricity for cryptocurrencies.

New bitcoins are "mined" using complicated arithmetic operations that consume a large amount of electricity.

According to the report, the Hardin power plant operated 236 days in the first nine months of last year.

In the second quarter of 2021 alone, the power plant blew around 187,000 tons of CO₂ into the air - that was 5,000 percent more than in the same period of the previous year.

Hardin is working "close to full capacity," Bitcoin firm Marathon said in December.

On the first of December last year, 34 bitcoins were mined – they would be worth around one million euros at the current rate.

The comeback of the power plant is a "disaster for the climate," say environmentalists.

"This is not about old ladies freezing to death, but about the enrichment of a few people who are destroying the climate for us all," quotes the "Guardian" environmentalist Anne Hedges of the Montana Environmental Information Center.

Criticism of the energy consumption of cryptocurrencies is not new, but is becoming more relevant due to the boom in Bitcoin and Co.

Because the higher the Bitcoin price rises, the more Bitcoin miners compete to mine new coins.

This increases the complexity of the computing tasks and thus the energy consumption.

According to calculations by the University of Cambridge, the Bitcoin network alone currently consumes around 141 terawatt hours of energy per year - and thus more electricity than countries like Norway or Ukraine.

In the crypto scene, energy requirements are always an issue: When Tesla boss Elon Musk surprisingly announced last year that his company would not accept bitcoins as a means of payment, the manager justified this with the high consumption of fossil fuels in cryptocurrencies.

Bitcoin supporters, on the other hand, point out that a growing proportion of bitcoins are being mined with renewable energy.

Fred Thiel, head of the mining company Marathon, also rejects the criticism of his industry.

"I understand some people's need to point fingers at bitcoin miners," he said in an interview.

"But compared to any other industry, it doesn't matter."