There’s a lesser known story that needs attention. A big network of Chinese-backed Bitcoin mining operations in 12 U.S. states has been operating for a period now. Its expansion has raised concerns about about national security. Politicians and regulators need to ensure that these operations don’t threaten America’s safety.
A New York Times (NYT) report has uncovered this web of Bitcoin mining operations scattered across. It has sending shockwaves through national security circles.
How were the Chinese mines found?
Investigators started looking into the matter when a cryptocurrency mining facility in Cheyenne, Wyoming was opened by a Chinese company. National security experts at Microsoft are worried about the closeness of these facilities to important infrastructure.
The mining facility was located very close to oneof Microsoft’s data centers which served an Air Force base and Pentagon. The Air Force base was/is overseeing a confidential nuclear-armed intercontinental ballistic missile program. Concerns were really about potential intelligence theft.
The NYT piled these concerns in a report and sent it to the Committee on Foreign Investment in the United States. It is responsible for safeguarding national security interests and it should look into this matter.
How did the mining company respond to such allegations?
On the other hand, the president of one of the companies in the Cheyenne mining operation (Bit Origin Ltd.) denied all allegations. He argued that the location was selected primarily based on securing a reliable power supply. However, no one cannot just look over the fact that these mining facilities are very close to military infrastructure and dismiss it for a coincidence.
Even though we are located near Microsoft, and a few miles from the base, without power, our operation wouldn’t be viable
How China could have set it up slowly
The Chinese link in this case goes beyond the location of these mining facilities. A major mining equipment company called Bitmain decided to sell a lot of their stock to the United States just after China banned Bitcoin mining.
While the shipments looked like they were not connected to the Chinese government, they were traced back to the Communist Party. Records also revealed a five-fold increase in equipment shipments to the U.S. in the last five years.
Environmental concerns over crypto mining
The report’s revelations highlight the need for better oversight by authorities. These Chinese mining facilities, collectively consume electricity that can power 1.5 million households. The problems with these mining operations go beyond the pro-crypto narrative.
Politicians in the U.S. have been very critical of the environmental load put by crypto mining activities. Although there have been arguments for and against its environmental impact, the facilities do consume a lot of power which can put load on local electricity networks.
In April, the New York times released a report on crypto mining which claimed that a whopping 85% of their energy comes from non-renewable sources. It’s like having 3.5 million cars revving their engines on the highway.