Cheaper Electricity for miners: Kentucky reviews proposal.

  • Kentucky contributes 20% of the nation’s Proof-of-Work consensus. Ranked second after New York.
  • Ebon International LLC to get discounted electricity, and Bitki-Ky already had $25,000 tax credits. 
  • Bitcoin might soon become a ‘zero emission network.’

Many major Bitcoin mining companies are cost-cutting or are shutting down. Crypto miners, especially Bitcoin miners worldwide, are facing a trifecta of problems:

  • Ever-increasing energy costs
  • The increased difficulty
  • The dropping rate of BTC in the market

The second and third problems can not be solved easily, and the difficulty will keep rising, even if the BTC rate goes up. The only solvable problem is providing either greener energy or energy at a lower or subsidized cost. 

According to research, the energy consumption for mining 1 BTC can power 9 average US household for three months. 

The Kentucky government is exploring the possibilities of providing discounted electricity to crypto miners. This ought to raise its cost for the general residents.

The Kentucky Public Service Commission (PSC) is believed to have opened a probe into two proposed contracts that could provide electricity to the crypto miners at a discounted price. According to a December 5 statement from the environmental law group Earthjustice, the department is looking into whether providing subsidized electricity to the miners will raise electricity costs for the residents. 

Two mining companies have had contracts with Kentucky Power. One is a 250-megawatt mining facility in Louisa, named Ebon International LLC., and the other is a 13-megawatt mining facility in Waverly, named Bitki-Ky.

Bitki-Ky has already received a tax credit of $250,000 from the state of Kentucky, while the contract proposes providing Ebon International with discounted electricity. The final verdict will come after the Kentucky tax break bill for local crypto miners passes. 

This step could boost the miners, but Earthjustice argues that it will pressure the residents and make electricity costlier for Kentuckians. The group also feels that mining is extremely and exponentially energy-intensive by design. 

Thomas Cmar, a senior attorney for the environmental group, says they will be keeping a close eye on the hearings to understand what extra Kentuckians will have to pay for the discounted price. Favouring one sector above all is not democratic. 

“I’m hopeful that the commission will see these cryptocurrency mining companies’ empty promises that they will benefit local communities […] and give more scrutinizing to contracts like these in future.”

The group feels that cryptocurrency mining does not generate employment opportunities due to its highly automated model. Plus providing them with discounts will cost dearly to the residents of Kentucky. 

Kentucky now ranks second after New York in proof-of-work mining activities, contributing 20% of the country. Making the state a hotspot for miners.

Bitcoin is going ‘Zero-Emission.’ 

Bitcoin Mining Council published a report claiming that they’ll soon be a ‘zero-emission network’ achieved by combusting stranded methane gas to mine BTC. The gas is normally just emitted into the atmosphere without any use.