Summary: Advocacy group Public Citizen is attempting to thwart the first-ever application from a crypto mining operation to the U.S. Department of Energy requesting permission to export U.S. electricity. DMG Blockchain Solutions applied to the U.S. Department of Energy on January 29, 2020 to export U.S. electricity to the company's facilities in Canada. DMG wrote that ...

Advocacy group Public Citizen is attempting to thwart the first-ever application from a crypto mining operation to the U.S. Department of Energy requesting permission to export U.S. electricity.

DMG Blockchain Solutions applied to the U.S. Department of Energy on January 29, 2020 to export U.S. electricity to the company's facilities in Canada. DMG wrote that the electricity would be used to host servers to ensure the security of public blockchains, but in a letter released on Thursday, June 25 Public Citizen pointed out that the application failed to explicitly state that the company mines cryptocurrency. DMG's application marks the first time a foreign crypto mining company has requested to import U.S. electricity. 

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Public Citizen's letter goes on to state that crypto mining wastes large quantities of electricity, pointing out a wasteful element of the proof-of-work system. Miners that do not win the block reward have squandered power while competing. 

DMG stated in its application that its power expenditure will increase from 15 megawatts on a steady load basis to 60 megawatts within the year and will likely continue to grow beyond that. The company's application argues that it will adhere to guidelines laid out in the Federal Power Act by only purchasing surplus power, which will not impede the U.S. power supply. Public Citizen countered this point in its letter writing that the overwhelming power needs of a crypto mining operation will inevitably strain U.S. power supply. It added that global power demand for cryptocurrency mining is estimated to be 7,670 megawatts, roughly 1% of the U.S. electricity generating capacity, emphasizing that the crypto mining industry is still in its infancy. Public Citizen argued that exporting electricity for crypto mining could also drive consumers' energy costs up.

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In 2018, Plattsburg became the first city in the U.S. to place a ban on crypto mining for 18 months, citing complaints from residents about a spike in power bills after the city became a hub for cryptominers. The biggest mining operation in the city, Coinmint, used 10% of the city's total power budget over the course of two months. Similar halts on crypto mining were also implemented across Washington State in following months. 

The Department of Energy's decision with DMG could set a precedent for future applications. DMG's request is the first by a crypto mining company to import U.S. electricity. With most miners concentrated outside of the U.S. in countries like China and the Czech Republic where electricity is cheaper, approving DMG's application could lead to a stream of future requests. Public Citizen warned the Department of Energy to proceed with extreme caution.

By Emily Mason