One of the biggest criticisms of cryptocurrency, and Bitcoin in particular, is the highly volatile nature of digital coins. However, that's for investors and miners to worry about. A larger concern that is starting to draw increased attention is the power usage that comes from mining cryptocurrencies on a large scale. Over in Washington, where power is relatively cheap compared to other parts of the country, there's a twofold concern—that power bills will go, and that electric utilities will not be able to keep up with demand.
These are not new concerns. It was reported earlier this month that Plattsburgh, New York placed an 18-month ban on new commercial cryptocurrency mining operations after the city was forced to buy additional power to keep up with the rising demand, which in turned caused electricity rates to up for the area's more than 30,000 residents. Plattsburgh had become a hot spot for mining because of relatively low utility rates of 4.5 cents per kWh.
Several districts in Washington are now battling the same thing. Chelan County, along with its neighboring Douglas and Grant counties, have been popular destinations for Bitcoin mining for the past several years because the area uses cheap hydropower. This has attracted large-scale mining operations, with some miners setting up shop in large, state-of-the-art warehouses and others repurposing cargo containers. It's estimated that by the end of the year, the area could account for nearly a third of the global output of new Bitcoin, and significant chunks of other cryptocurrencies like Ethereum.
There are three public utilities districts (PUDs) that service the area, and each one is scrambling to figure out how to deal with the growing demand. Steve Wright, Chelan County PUG general manager, said the demand imposed by mining presents "a very different kind of problem than anything we have addressed before," and that handling the growing will require "a whole new way of thinking."
To put it all into perspective, before the mining boom, Chelan County's power needs would grow by around 4 megawatts annually, which is enough to power around 2,250 homes. Since January of 2017, however, Bitcoin miners have requested 210 megawatts for mining operations they want to set up in the area. As a public utility, the PUD has to consider the request.
Mining overall has become less profitable over the last several weeks and months, hence part of the reason why graphics cards have fallen back to MSRP levels and are now easier to find in stock. However, large scaling mining operations can weather the storm, and so problems like this will remain for public utilities to figure out.