Cryptocurrency mining has always been contentious among crypto entrepreneurs, investors, and climate activists. However, it is an undeniable fact that proof-work-mining requires significant amounts of power to perform. As Bitcoin ming becomes progressively difficult, the demand for power will only increase. On top of that, centralized Bitcoin mining will soon become a reality. These large-scale units will be one of the biggest contributors to carbon emissions. In El Salvador, President of the country Nayib Bukele has talked about the plans of building a Bitcoin city that will be a hub of mining and innovation. Interestingly, he claims that a nearby active volcano will power the entire city. Many have raised suspicion at such a claim and doubted its efficacy. Even international bodies like the World Bank and IMF have suggested against it.
Fitch Ratings is an international body renowned for its credit score ratings. In their recent report, the agency suggested power grid suppliers from the United States tread into the crypto mining world carefully.
According to the report, crypto mining is an extremely power-intensive industry, but that does not resolve the problem of its instability. According to Fitch Reports, crypto mining operations can be downscaled or stopped entry at a moment’s notice. However, the power grid would still have a huge surplus that would essentially go to waste. The generation of cost for this amount of electricity will be significant, and power grids will have to bear its cost. For these reasons and more, Fitch Reports want power suppliers to be careful when dealing with Bitcoin mining units.