Bitcoin mining, a complex activity that requires adding data to the blockchain, has been the subject of complaints. While it’s a profitable trade for some, it has an impact on the local power grid.
Some estimates say you need up to 155,000 kilowatts (kWh) of electricity just to hold one coin, and each transaction requires about 851 kWh, equivalent to one month’s electricity supply for an average US home.
The threat of Bitcoin mining is global, with many national and local economies feeling the pinch. For example, Tenaga Nasional Berhad, Malaysia’s national electricity utility, reported a loss of more than 440 million Ringgit (about $101 million) due to mining-related power theft. This figure is on top of the reported seizure of $500,000 worth of Bitcoin mining-related electronics.
Local Reports Say Theft Has Affected TNB For Years
A report from The Star claims that Tenaga Nasional Berhad is bleeding due to theft related to Bitcoin mining since 2020. According to Comm Datuk Seri Mohd Shuhaily Mohd Zain, the company faced increasing losses every year.
The director added that in 2020 alone, the company lost R5.9 million, which rose to R140.4 million the following year. Then in 2022, the loss reached R124.9 million; in 2023, grow to R67.1. This year, the loss is R103 million and counting.
As of today, the market cap of cryptocurrencies stood at $2.4 trillion. Chart: TradingView.com
Bitcoin Mining continues to influence local supply
TNB and local authorities say the losses date back to 2018 and are linked to illegal mining operations. TNB said in a separate paper that their losses between 2018 and 2023 amounted to more than $755 million.
Although crypto mining only accounts for a small portion of Malaysia’s total consumption, it has a significant financial impact. Besides TNB’s loss, more than $500,000 worth of electronic equipment linked to illegal mining was seized.
The government’s seizure of the electronics is part of Malaysia’s tax evasion campaign involving various parties involved in secret money. Malaysia’s Criminal Investigation Department plans to investigate the thefts and factors contributing to the increasing trend of losses.
How Does Bitcoin Mining Affect Energy Companies?
Bitcoin mining is a complex activity that involves adding new data to the blockchain but requires a lot of energy. In Bitcoin exchange, a person or company must solve a complex mathematical problem to “hold” or earn bitcoin.
However, experts say that this process requires a large amount of energy including energy. In many countries such as Malaysia, the requirement for a large supply of electricity often tempts people to evade payments and commit crimes.
The featured image was created using Dall.E, a chart from TradingView
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