bitcoin mining, a complex activity that requires adding data to the blockchain, has been the subject of complaints. While it is arguably a lucrative business for some, it takes a toll on the local power grid.
Some estimates say it takes up to 155,000 kilowatt hours (kWh) of electricity just to mine one coin, with each transaction requiring around 851 kWh, equivalent to a month's supply of electricity for the average US home.
The threat of bitcoin mining is global and many national and local economies are feeling affected. For example, Tenaga Nasional Berhad, Malaysia's national electricity supplier, has reported bitcoin-mining-blamed” target=”_blank” rel=”noopener nofollow”>losses of more than 440 million ringgit (about $101 million) due to mining-related electricity theft. This figure is in addition to the reported confiscation of electrical items related to bitcoin mining valued at $500,000.
Local reports say theft has plagued TNB for years
A report from The Star says that Tenaga Nasional Berhad has been bleeding from bitcoin-mining-15349055540234″ target=”_blank” rel=”noopener nofollow”>Thefts related to bitcoin mining since 2020. According to Comm Datuk Seri Mohd Shuhaily Mohd Zain, the company suffered increasing losses year after year.
The director added that in 2020 alone, the company lost RM5.9 million, which increased to RM140.4 million the following year. Then in 2022, losses reached RM124.9 million; in 2023, they grew to RM67.1. This year, losses amount to RM103 million and rising.
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As of today, the market cap of cryptocurrencies stood at $2.4 trillion. Chart: TradingView.com
bitcoin mining continues to impact local supply
TNB and local authorities claim that the losses date back to 2018 and are related to illicit mining operations. TNB said in a separate document that its losses between 2018 and 2023 amounted to more than $755 million.
Although bitcoin-mining/” target=”_blank” rel=”noopener nofollow”>crypto mining Although it only represents a small part of Malaysia's total consumption, it has a substantial financial impact. Aside from TNB's losses, more than $500,000 worth of electrical equipment linked to illicit mining operations has been confiscated.
The seizure of these electrical items by the government is part of Malaysia's campaign against tax evasion involving different parties involved with cryptocurrencies. Malaysia's Criminal Investigation Unit plans to investigate the thefts and the factors contributing to the increasing trend of losses.
How does bitcoin mining affect electric companies?
bitcoin mining is a complex activity that involves adding new data to the blockchain, but it requires a lot of power. In exchange for bitcoin, an individual or company must solve a complex mathematical problem in order to “mine” or acquire bitcoins.
However, experts say that this process requires a large amount of computational power and energy. In many countries such as Malaysia, the need for substantial electricity supply often tempts people to evade payments and commit crimes.
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