Bitcoin and some other cryptocurrencies rely on very powerful computers to perform high-level mathematical calculations. This is known as "crypto mining" and consumes up to 2% of all electricity in the United States, according to the Energy Information Administration.
Starting this week, federal agencies will begin collecting information from cryptocurrency mining companies about where and how that power is used, but the cryptocurrency industry is not happy to release that information.
When Colin Reed was mayor of Plattsburgh, New York, a few years ago, several Bitcoin mining companies sprung up in the small town.
They brought their server racks to take advantage of Plattsburgh's cheap hydro, at least it was cheaper to a point.
"If we exceed that quota, because bitcoin is in town, we have to buy more energy in the spot market, which means everyone's rates will go up significantly," Reed said.
Reed, who is an economics professor at SUNY Plattsburgh, wants more transparency about the industry's energy use.
But "the industry probably isn't willing to tell the whole story," he said.
Lee Bratcher, president of the Blockchain Council of Texas, said the industry is not afraid of data collection. "We are only concerned with how the data is collected," he said.
Bratcher argues that mining companies could find themselves at a competitive disadvantage if the feds release what they call confidential information.
The industry is considering how to respond to the EIA request, including how to take legal action, he added.
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