Cryptocurrency

United

Bitcoin

Impact

The world is witnessing a significant surge in <a href="https://ultramining.com/news/en/minnesota-man-faces-accusations-of-electricity-theft-for-bitcoin-mining/" rel="noopener noreferrer nofollow">electricity</a> consumption by <a href="https://ultramining.com/news/en/crypto-miners-shift-gears-ai-is-the-new-gold-rush/" rel="noopener noreferrer nofollow">data centers</a>, driven by the growing demands of cryptocurrency mining and artificial intelligence, as detailed in a recent report from the International Energy Agency (IEA). This increase, potentially doubling by 2026, poses environmental concerns due to the associated greenhouse gas emissions, according to T<a href="https://www.theverge.com/2024/1/24/24049047/data-center-ai-crypto-bitcoin-mining-electricity-report-iea" rel="noopener noreferrer nofollow">he Verge</a>.
In 2022, data centers, including those for cryptocurrencies and AI, accounted for about 2 percent of global electricity demand, using around 460 terawatt-hours (TWh). Remarkably, crypto mining was responsible for nearly a quarter of this consumption. The anticipated rise in electricity use could reach up to 1,050TWh by 2026, depending on the technology's development rate.
The <a href="https://ultramining.com/news/en/pennsylvania-a-new-hub-for-cryptomining-ignites-environmental-concerns/" rel="noopener noreferrer nofollow">United States</a> leads with the most data centers, constituting 33 percent of the global total. It's also the top player in Bitcoin mining. Predictions indicate a rapid increase in data center electricity consumption in the <a href="https://ultramining.com/news/en/major-bitcoin-mining-pool-foundry-usa-to-introduce-fee-structure/" rel="noopener noreferrer nofollow">US</a>, potentially rising from 4 percent of national demand in 2022 to 6 percent by 2026. This growth is partly driven by expanding 5G networks and cloud-based services.
Ireland, known for its low corporate tax rates in the EU, is experiencing a boom in data center construction. Its current 82 data centers consumed 17 percent of the country's electricity in 2022. With 54 more centers under construction or approved, this figure could rise to nearly a third of Ireland's annual electricity demand by 2026.
The environmental impact of these developments is significant. In London, for example, electricity demands from data centers have hindered housing development, while in <a href="https://ultramining.com/news/en/texas-residents-challenge-bitcoin-mining-industrys-impact-on-power-grid-and-communities/" rel="noopener noreferrer nofollow">Texas</a>, crypto mines are adding strain to an already stressed power grid. About 40 percent of the electricity demand in data centers is for computing, and another 40 percent for cooling the equipment.
The incorporation of AI notably increases electricity demand. Google Search, for instance, could use up to ten times more electricity when fully integrating AI. The AI industry's electricity consumption could be tenfold higher in 2026 compared to last year.
Cryptocurrency electricity demand is predicted to rise by 40 percent by 2026. While the Ethereum blockchain dramatically reduced its electricity use by adopting a more efficient transaction validation method, Bitcoin has yet to follow this example, contributing significantly to carbon emissions from crypto mining.
Despite these challenges, there's a silver lining: the IEA forecasts a global acceleration in renewable energy growth, potentially surpassing coal to generate more than a third of the world's electricity by 2025. However, this alone won't solve the challenges posed by new data centers. Improving energy efficiency, such as adopting high-efficiency cooling systems, is crucial since a rapid increase in electricity demand could outstrip the growth in renewable energy sources.

Data Centers’ Surging Energy Use: The Impact of AI and Crypto Mining

Ultramining_Eng

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