Bitcoin mining, a complex activity that requires adding data to the blockchain, has been the subject of complaints. While it may be a lucrative business for some, it impacts the local power grid.
Some estimates say you need up to 155,000 kilowatt hours (kWh) of electricity to mine just one coin, and each transaction requires approximately 851 kWh, which is equivalent to a month’s electricity supply for an average US household.
The threat of Bitcoin mining is global, with many national and local economies feeling the pinch. This is what Tenaga Nasional Berhad, Malaysia’s national electricity supplier, has reported losses of more than 440 million Ringgit (approximately $101 million) due to mining-related electricity theft. This figure is in addition to the reported seizure of electrical equipment related to Bitcoin mining, worth $500,000.
Local reports say theft has been affecting TNB for years
A report from The Star says Tenaga Nasional Berhad is bleeding Bitcoin mining related thefts since 2020. According to Comm Datuk Seri Mohd Shuhaily Mohd Zain, the company has been experiencing increasing losses year-on-year.
The director added that the company lost RM5.9 million in 2020 alone, which rose to RM140.4 million the following year. Subsequently, losses in 2022 amounted to RM124.9 million; in 2023, they grew to RM67.1. This year, losses amount to RM103 million and counting.
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 the losses date back to 2018 and are linked to illegal mining activities. TNB said in another separate document that their losses between 2018 and 2023 totaled more than $755 million.
Although crypto mining The country represents only a small portion of Malaysia’s total consumption, but has significant financial implications. In addition to TNB’s losses, more than $500,000 worth of electrical equipment related to illegal mining activities has been seized.
The seizure of these electrical devices by the government is part of Malaysia’s campaign against tax evasion involving several parties involved in cryptocurrencies. The Malaysian Criminal Investigation Unit plans to investigate the thefts and the factors contributing to the increasing loss trend.
How Does Bitcoin Mining Impact Electric Utilities?
Bitcoin mining is a complex activity that adds new data to the blockchain, but requires a lot of power. In exchange for Bitcoin, an individual or company must solve a complex mathematical problem to “mine” or acquire Bitcoin.
However, experts say that this process requires a large amount of computing power and energy. In many countries, such as Malaysia, the need for a substantial electricity supply often tempts people to avoid payments and commit crimes.
Featured image created with Dall.E, chart from TradingView