The Real-World Costs of the Digital Race for Bitcoin

The New York Times has identified 34 such large-scale operations, known as Bitcoin mines, in the United States, all putting immense pressure on the power grid and most finding novel ways to profit from doing so. Their operations can create costs — including higher electricity bills and enormous carbon pollution — for everyone around them, most of whom have nothing to do with Bitcoin.

Until June 2021, most Bitcoin mining was in China. Then it drove out Bitcoin operations, at least for a time, citing their power use among other reasons. The United States quickly became the industry’s global leader.

In an extension of the labor theory of value, it’s almost like the value of cryptocurrencies comes precisely from the externalities in their production—their “value” is directly proportional to the waste and destruction they cause.