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Indiana promises reliable energy to attract cryptocurrency miners
Indiana lawmakers have pledged to provide large resources of cheap electricity and water to large companies, with the aim of attracting data centers and cryptocurrency mining operations to the state.
The allure of large user bases has already attracted the attention of tech giants such as Meta, Amazon, Google and Microsoft, as well as cryptocurrency mining company AboutBit, all of which have invested in or are planning to build facilities in Indiana.
Incentives for tech giants, innovation for cryptocurrency miners
While Indiana offers financial incentives to various organizations, these benefits do not extend to AboutBit and other cryptocurrency miners.
This distinction has not deterred AboutBit, which innovatively converted a 50-year-old power plant into a sustainable, liquid-cooled cryptocurrency mining facility adjacent to the Merom Generating Station.
In a notable development, this May, Amazon declared an $11 billion investment in Indiana. Gov. Eric Holcomb emphasized the state’s ability to meet the substantial utility needs of such a project, noting that Amazon’s decision was influenced by ensuring sufficient electricity and water supplies.
Echoing this sentiment, David Rosenberg, secretary of Commerce and head of the Indiana Economic Development Corp., confirmed the state’s willingness to provide these critical resources.
Cryptocurrency miners join Indiana’s growing list of data center tenants. Source: Indiana Capital Chronicle
The cryptocurrency sector, especially Bitcoin mining, has shown significant energy demands. Analyst Paul Hoffman of Best Brokers reported that, as of May 28, 2024, Bitcoin miners in the United States had spent $2.7 billion on electricity.
Since the beginning of the year, the industry has consumed 20,822.62 GWh of electricity. With the average commercial electricity rate at $0.1281 per kWh in February, this consumption translates into a huge financial expense.
Putting Bitcoin’s energy consumption into perspective
Energy requirements for Bitcoin mining increased following the April halving. Before the halving, mining one Bitcoin required 407,059.01 kilowatt hours (kWh), costing approximately $52,144.26.
After the halving, the energy needed nearly doubled to 862,635.55 kWh, with the cost rising to around $110,503.61 at current rates.
Hoffman further illustrated the scale of this energy consumption, pointing out that it could charge every electric vehicle in the United States 87.52 times or power nearly two million households for a year, or 1.51% of all US households.
Additionally, the January Bitcoin ESG Forecast revealed that sustainable energy use in Bitcoin mining reached a new high of 54.5%, with a 3.6% increase in sustainable mining practices during 2023 .