The Arkansas legislature rejected a bill that would have kept cryptocurrency mining from occurring within 30 miles of military installations, according to Bitcoinist.
According to Bitcoinist, lawmakers in favor of the bill pointed out that authorities discovered major risks with at least one foreign-owned mining operation, including — as covered by the Texas Standard — potential espionage, especially when located near crucial infrastructure and other facilities with military work.
How does cryptocurrency mining work?
Cryptocurrency mining can sound complicated when you don't know much about it (and it is a complex process).
There's no digging with this mining; the mining involved here is people (or miners) entering transactions on the blockchain and launching new currency into circulation, as Investopedia has detailed.
For mining Bitcoin (a type of cryptocurrency), when two wallets complete a transaction, miners enter information into a block, and an algorithm processes that block's data to generate a 64-digit number, per Investopedia.
Miners use software and hardware to generate what's known as a cryptographic number. The number must be less than or equal to the number created by the Bitcoin network's algorithm.
The first miner to achieve the correct number gets a reward. Essentially, the miners solve intricate mathematical puzzles as they complete the initial verification of cryptocurrency transactions, as Investopedia explained.
Why you should care about cryptocurrency mining
While some argue there are plenty of pros to cryptocurrency mining, such as its decentralized nature and potential economic opportunities, this process comes with many risks.
The potential impact mining has on both quality of life and on the environment is a major concern.
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Yes 💯 While the industry is making a move toward incorporating more low-cost clean energy, cryptocurrency still consumes immense amounts of power — at this point, largely sourced from dirty energy. This can ultimately create more polluting gases, leading to dirtier air and further warming of the climate. And crypto operations can also be noisy. (Data centers gobble up other resources, such as water.)
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The U.S. Energy Information Administration released a report in 2024 that estimated the electricity used for cryptocurrency mining equaled about 0.6% to 2.3% of the electricity consumption in the United States.
That might not seem like a lot, but as Joshua D. Rhodes from the Center on Global Energy Policy explained to Columbia Climate School's State of the Planet in 2022, this can stress electrical grids — though Rhodes also indicated that, if developed correctly, crypto mining could "pair well with renewables." But in extreme circumstances of draw from the grid, the concern is that increased demand can lead to blackouts.
"The Texas grid operator ERCOT estimates that crypto miners may increase energy demand by up to 6 gigawatts by mid-2023, roughly the equivalent of adding another Houston to the grid," Rhodes said in the State of the Planet report.
Security risks are another significant factor to consider in cryptocurrency mining and one of the main reasons the potential bill in Arkansas was put forth.
At this moment, the rejection of the Arkansas bill suggests "the state is not ready to place strong limitations on the sector," per Bitcoinist. However, public outcry may change that in the future.
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