Consumer Watchdog Moves to Block Canadian Bitcoin Miner From US Power Grid

Consumer advocacy group Public Citizen is trying to stop Canadian firm DMG Blockchain from plugging its bitcoin mining rigs into the American power grid.

In a letter published Thursday, the nonprofit implored the U.S. Department of Energy (DOE) to scrutinize, if not outright reject, DMG Blockchain’s bid to export U.S. electricity to Canada and moved to intervene. The group’s Energy Program Director Tyson Slocum and Climate Program Director David Arkush co-wrote the letter.

DMG Blockchain has been aggressively expanding its cryptocurrency mining capacity in recent months. On May 27, the data center operator tripled its fleet of ASIC miners by adding 1,000 M30s. Two days later, it applied for permission to export U.S. electricity, writing that its 15 megawatt mining operation will grow to 60 megawatts in the next year.

“The DMG application is unique in that it represents a maiden effort by an energy-hungry cryptocurrency-mining industry to import electricity from the United States to Canada to meet its significant power demands,” Slocum and Arkush said.

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Slocum and Arkush said power utilities in Washington state have banned crypto miners for putting too much load on the grid. Washington butts up against DMG’s home territory of British Columbia, and both locations are attractive to crypto miners because of ample hydropower.

They also suggested DMG’s application may skirt federal laws prohibiting electricity exports that undermine or impair the U.S. power supply. For this, they cited crypto mining’s “staggering” energy waste, its upward impact on energy prices, the possibility that it could interfere with local attempts to introduce renewable power sources and climate change.

“U.S. cryptocurrency miners are struggling to meet their own power demands,” they said.

They warned DOE an approval could trigger a “rush” in foreign cryptocurrency miners looking to export U.S. electricity.

But Canadian crypto miners are already buying U.S. electricity though third-party power brokers, according to DMG Blockchain COO Sheldon Bennett. He said his 33-acre blended data center – it runs bitcoin rigs alongside traditional servers – will do the same if DMG's export application is not ultimately approved.

Bennett said Public Citizen's letter demonizes cryptocurrency mining without paying much attention to the far-heavier electrical load of other transaction-focused firms, like PayPal.

Additionally, he argued that the watchdog was ignoring the fact that the Pacific Northwest's dams produce more electricity than locals can conceivably use. That glut's only grown larger during COVID-19.

“We are like little droplets in the ocean compared to the amount of electricity that's out there,” he said.

UPDATE (20:30 6/25/2020): This article has been updated to include comment from DMG Blockchain.