magicbug At present crypto miners are like a plague of locusts, they setup in a country, primarily where they get cheap electricity. The amount of energy their process consumes adversely affects its price and availability in that country. The residents of the country are the ones that deal with the direct consequences - namely power outages and higher electricity prices. When the Internet connection is in doubt or increased energy costs are passed on to the crypto miners they move on to another country.
China and Iran were the two largest global contributors to the hash rate for Bitcoin until 2021 (combined total of 86%). After they implemented their crypto mining bans, the operations moved on to USA (36%), Kazakhstan (19%), Russia (12%), Canada (9%), Ireland (5%), Germany (4%). Consumers in Ireland and Germany were already paying some of the highest prices for electricity in Europe, they do however offer political stability, high speed Internet, and lots of data centres. I'm particularly interested to see how the government of Ireland is going to approach the issue.
Ireland is a relatively small island with a small population (5M) on the fringe of Europe. They kick started the economy in the 1980s by offering sweet corporate tax deals to companies to base themselves there. All the major tech companies at the time took advantage of what was on offer (Apple, IBM, Microsoft, Adobe, Corel, Intel, HP, Gateway, Dell, Oracle, SAP, Cisco, Ericsson etc.). Similar incentives were offered to the next generation and they too jumped on board (Amazon, Paypal, Google, Facebook, Twitter, etc).
The tax deals put the Irish government at odds with other EU countries, particularly France because Ireland in their view was assisting corporations to avoid tax. To give two examples, Carrefour (one of the top ten retailers worldwide) and Orange (formerly France Telecom and the 4th largest mobile network operator in Europe) are two large French companies that didn't operate in Ireland but ran their taxes through the country. The UK was an ally to Ireland on the matter because the UK government didn't want attention drawn to the various tax havens operating under British jurisdiction. After Brexit, Ireland lost that support and has now agreed to step into line with EU corporate tax. Some of the big fish have already began relocating their tax operations out of Ireland.
Accommodating the tech companies and selling Ireland as a major digital hub necessitated building some data centres. At present, there are 45 major data centres just outside of Dublin alone and there are 19 more in the planning or development stage. The country has gambled big of sustaining the requirements of the tech giants to keep them in the country.
In November 2021, the consumer price for electricity in Ireland was raised by 9%. There was a further increase of 15% introduced on January 17th, 2022. The increases were due to the fact that the majority of electricity generated in Ireland requires natural gas and the increased demand for electricity has meant importing more natural gas. There has been some debate about why the consumers are footing the bill for the situation the country finds itself in with regards to the electricity market. In 2020, the data centres were responsible for 11% of the national electricity consumption, by the end of 2021 it was 16%. That 4% increase correlates with the crypto mining operations moving in. It has been reported that the data centres are paying a rate that was fixed when they were responsible for less than 2% almost 20 years ago.
The issue is going to become a political hot potatoe because the agency that is responsible for the maintaining the national grid has said that based on current consumption rates, connecting the data centres that are currently under development and due to come online in the next few years will likely knock out the power for the country when they do so. On the other side is the government agency that sold the data centre expansion plans to the big tech giants like Amazon, Facebook, Google and Microsoft.
Blockchain and crypto-currencies are a noble idea however the technology requires a large amount of electricity. The reason the energy requirements are already massive and steadily increasing is because the miners are greedy, they have been growning their operations in order to increase their own chances in winning the lottery for mining each coin. Why be content with one mining rig when they could have two and double their chances and so the race began. There are entire data centres in Siberia dedicated to crypto mining a this point, it got to that level because people involved in mining got extremely greedy. We don't yet have a means to solve that problem of the energy consumption and the greed of certain individuals is escalating the issue.
Iran and Kosovo both banned crypto mining when it began impacting on the livelyhood of their own citizens, so far the government of Ireland has been happy to just pass the price of increased energy imports to the consumers. I'm not sure that policy will be sustainable in the long term.
At present the crypto miners are insulated from the impact that their activity is having and that is an uncomfortable conversation that needs to take place and the issue resolved.