THE UK’S National Grid has confirmed that despite fears, cryptocurrency mining poses little threat to the country’s supply chain.
And that high-tech capitalists making millions from mining are doing so in countries like Iceland because buying energy in Britain costs too much.
This comes despite claims that the currency miners are causing ‘blackouts.’
Electrical consumption is enormous
Britain’s electricity network is unlikely to be brought to its knees despite claims of policy makers and activists that mining is so enormous it poses a threat.
However, while there is no question the mining of currencies currently uses double the electricity consumption of Scotland from a global perspective; in reality the UK is facing next to no issues with the phenomenon.
The revelation from National Grid comes after Bank of England Governor Mark Carney blasted consumption rates branding them “enormous” and called on regulation of the currencies which he described as ‘speculative mania’.
His comments were made ahead of the G20 summit in Argentina where Mr Carney and other leading economists are to discuss regulation of the sector.
He said: “The costs of Bitcoin mining are enormous. Its current annual electricity consumption is estimated by some to be up to 52 terawatt hours, double the electricity consumption of Scotland.”
A spokeswoman for the National Grid revealed however that while the service operator is monitoring the rise of the phenomenon that “future growth” in the UK is not expected to be significant despite fears.
Data centres don’t eat much energy
The National Grid said: “At present, their mining is not a major contributor to demand in GB.
“Any GB cryptocurrency demand would likely appear as a small component within the data centre element of our Industrial and Commercial electricity demand modelling (data centres themselves perhaps accounting for only around maybe 1% of total GB demand although data is limited).
“Whilst cryptocurrency mining is clearly growing at a fast rate globally, the miners are likely to be most attracted to countries with the very lowest electricity prices and so future growth in GB is not currently expected to be significant.
“However, whilst we have no immediate concerns in relation to GB electricity demand, it is an area that we actively monitor as part of our electricity demand modelling in our Future Energy Scenarios.”
The news comes as the issue of mining is hot on the agenda in France where a company has invented a heater which pays for itself by mining coins.
French mining heats up
The Quarnot QC-1 is advertised as the world’s first crypto-heater, allowing consumers to mine cryptocurrencies and utilize the heat generated.
David Merry, CEO of Investoo Group, which owns Coinlist.me said: “Crypto mining is huge in Iceland and in countries like China it is fast becoming a tool to make money for those able to do so.
“Even in France we are seeing innovation in terms of practical solutions.
“Cost of electricity varies widely from country to country and while the UK is not the most significant in terms of cost in Europe, it’s certainly up there. People in Denmark, Germany and Belgium pay the most according to Eurostat but they are also charged huge tax levies.
“It certainly could be argued that our electricity supplies are more at risk of being affected by cyber-security issues like hacking. Around 65% of UK business is concerned by cyber attacks on energy networks so mining really pales in comparison.”
The news comes as UK regulators get set to clamp down on providers who are charging customers inflated prices.
This follows on from comments made by Prime Minister Theresa May last year in which she pledged to investigate pricing.
Energy stakeholders have been given to the end of May to respond to Ofgem’s requests.
The regulator has published one working paper on the design and implementation of a cap to protect all domestic gas and electricity consumers on standard variable tariffs (SVTs) or other default tariffs.
The Regulator said: “The main feature of the default tariff cap which distinguishes it from the existing safeguard tariffs is the wider scope…
”A key area of our focus will therefore be what implications this broader scope has for how the cap should be designed.”
The regulator added: “We have not included questions in this paper but are inviting comments on any or all of the issues raised.”