The standoff between cryptocurrency miners and utility companies continues but some may be looking for a way to work together.
Mining is becoming more popular
As cryptocurrency mining grows, so does the need for more power. Mining is a power-intensive process, utilizing large numbers of servers. Bitcoin mining alone absorbs more power than the country of Ireland. Therefore, Crypto-miners are always seeking the cheapest rates in order to maintain profitability. In fact, the cost of power can make or break a mining operation.
The hunt for cheap electricity has led to many confrontations with the utility companies. In, March, Chelan County, Washington, utility regulators had to suspend applications from cryptocurrency miners because the impact their power-intensive operations were having on the small county of Washington was becoming untenable. As 100’s of new mining operations look to set up in rural Washington, due to their cheap utility rates, the tensions have increased. One public utility company even had to beef up security as would-be miners have been harassing their staff. These tensions have led to some companies deciding to set up their own power grids. A Canadian company, DMG Blockchain, have invested in building their own sub-station in British Columbia.
Miners vs. utility companies
It seems on the surface that there is money to be made on both sides, so why the standoff? From the point of view of the utility companies, it would involve a massive investment on their part in an industry with an uncertain outcome. Kevin Nordst of Grant PUD, Washington, states that the infrastructure is not there and it would require millions if not billions of investment to meet the massive demand. The risk of investing in an industry with no track record and a lot of unknowns leaves much to be desired. The utility companies would be building power plants to serve a single industry in an area that does not require that kind of power. If crypto-mining were to disappear, for whatever reason, the utilities would be left footing the bill with an abundance of power they can’t sell. With these concerns in mind and money to be made, both sides are looking for suitable solutions.
Utility companies are looking to start from the ground up. Their first concern is on how to regulate and asses crypto-mining operations. Grant PUD, has created a new classification, known as the ‘evolving class’, this would include not only crypto-miners but any other emerging technologies with power-intensive needs. From this starting point, they would develop effective policies tailored towards these growing industries.
Solutions on the horizon
Crypto-miners, on the other hand, are looking for solutions in the existing system which they believe can benefit all. Power companies keep an excess of power at any given time in order to meet especially high demands. The majority of the time this power goes unused. What crypto-miners are suggesting is to have access to this excess power during the periods where it is not needed and when it is needed they are happy to close down operations. This would give utilities the opportunity to sell off unused power whilst still having the capability to meet the demands of their population base.
As the industry continues to grow we will no doubt see the confidence in certainty rise and more partnership solutions between utilities and crypto-miners.