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Is it AI - or is it Bitcoin mining?

https://qz.com/ai-bitcoin-mining-1851623128 (August 2024)

AI-powered Bitcoin mining would be a game changer — but not without challenges

Major Bitcoin miners are already incorporating AI into their systems

Artificial intelligence is rapidly making its way into nearly every industry, and Bitcoin mining is no exception. The process of generating new Bitcoin by solving complex mathematical problems has grown increasingly competitive and intriguing, prompting miners to integrate AI into their operations.

Miners believe that generative artificial intelligence could soon play a pivotal role in enhancing the infrastructure of Bitcoin mining. As the industry faces increasing pressure to improve efficiency and remain profitable, especially after the halving event, AI offers a promising solution.

It seems like these “AI data centers” use energy just like Bitcoin mining facilities. 🤔

https://www.eia.gov/todayinenergy/detail.php?id=61364(February 2024)

Tracking electricity consumption from U.S. cryptocurrency mining operations

Electricity demand associated with U.S. cryptocurrency mining operations in the United States has grown very rapidly over the last several years. Our preliminary estimates suggest that annual electricity use from cryptocurrency mining probably represents from 0.6% to 2.3% of U.S. electricity consumption.

This additional electricity use has drawn the attention of policymakers and grid planners concerned about its effects on cost, reliability, and emissions. Key challenges associated with tracking cryptocurrency mining energy use include the difficulty of identifying cryptocurrency mining activity among millions of U.S. end-use customers and the dynamic nature of the crypto market, where mining assets can be moved rapidly to areas with lower electricity prices.

Although cryptocurrency mining began in the United States about a decade ago, the activity began to expand rapidly in 2019. Recent growth is largely due to cryptocurrency mining operations relocating to the United States from China after that country cracked down on digital currency mining in 2021, though reports indicate that there may still be some mining in China. As cryptocurrency mining has increased in the United States, concerns have grown about the energy-intensive nature of the business and its effects on the U.S. electric power industry. Concerns expressed to EIA include strains to the electricity grid during periods of peak demand, the potential for higher electricity prices, as well as effects on energy-related carbon dioxide (CO2) emissions.

Grid planners have also begun to express concern over the rapid growth in electricity demand associated with cryptocurrency mining. For example, the North American Electric Reliability Corporation (NERC) indicates in its latest long-term reliability assessment that “due to unique characteristics of the operations associated with cryptocurrency mining, potential growth can have a significant effect on demand and resource projections as well as system operations.”

…Larger networks of mining units can be configured to increase the computational power. One way to assess the size of a network is the number of and type of mining units at each site. Individual cryptocurrency facilities we identified can employ 10,000 to 20,000 mining units, although the largest facilities are known to have as many as 100,000 mining units in operation. Because these networks consist of modular units, operators can relocate their equipment so long as they can construct facilities that protect and control the climate of the networked mining units. Mining units are often stacked in containers for relatively quick and economical transport.

The primary operating cost of a cryptocurrency mining facility is expenditure for electricity. The computational effort needed to support profitable cryptocurrency mining consumes large amounts of electricity to operate the machines as well as to cool equipment to prevent overheating. Consequently, owners are constantly seeking various alternatives to acquire substantial amounts of power at the lowest possible cost.

…cryptocurrency mining can be performed with facilities of many sizes, ranging from individual workstations to massive data centers...

This estimate of U.S. electricity demand supporting cryptocurrency mining would equal annual demand ranging from more than three million to more than six million homes. The low end of the range would equal annual electricity usage for entire states such as Utah and West Virginia, among others. Note that the CBECI-based estimates provided here are only based on Bitcoin and do not include other proof of work cryptocurrencies.

We have been able to track electricity use at a group of five small U.S. power plants in Montana, New York, and Pennsylvania where cryptocurrency mining has occurred. The combined power generation at these five generating facilities rose sharply beginning in 2021 when cryptocurrency miners established operations. Once more, the amount of direct use electricity within the plant itself—used to feed the mining operations—has increased to a larger percentage of the plant’s output. Prior to the installation of the cryptocurrency mining equipment, output from the five plants had been much lower. The previous underutilization of these power plants has attracted cryptocurrency miners to these facilities given prospects of dedicated electricity at low rates.