Illegal Bitcoin Mining Causes Significant Damage to Malaysian Electricity Company
Bitcoin mining, a complex activity that requires adding data to the blockchain, has raised concerns. While it can be a profitable endeavor for some, it has significant implications for the local electricity grid.
Estimates suggest that up to 155,000 kilowatt hours (kWh) of electricity are needed to mine one coin, with each transaction requiring around 851 kWh. This is equivalent to the monthly electricity supply for an average household in the US.
Bitcoin mining’s impact is felt globally, affecting many national and local economies. For instance, Malaysia’s national electricity provider, Tenaga Nasional Berhad, has reported losses of over 440 million Ringgit due to theft of electricity related to mining, in addition to confiscations of mining-related electrical items valued at $500,000.
Local Reports Indicate Ongoing Impact on TNB
According to reports from The Star, TNB has been experiencing losses due to Bitcoin mining-related thefts since 2020. The company has seen escalating losses year after year, with losses growing from RM5.9 million in 2020 to over RM103 million this year and still increasing.
As of today, the market cap of cryptocurrencies stood at $2.4 trillion. Chart: TradingView.com
Bitcoin Mining Impact on Local Supply Continues
TNB and local authorities attribute the losses to illicit mining operations dating back to 2018. TNB reports total losses between 2018 and 2023 surpassing $755 million.
Although crypto mining forms a small portion of Malaysia’s total electricity consumption, it has a significant financial impact. Apart from TNB’s losses, over $500,000 worth of electrical equipment linked to illicit mining operations have been seized.
The government’s confiscation of these items is part of Malaysia’s crackdown on tax evasion connected to cryptocurrencies. Malaysia’s Criminal Investigation Unit intends to investigate the thefts and factors contributing to the escalating loss trend.
Effects of Bitcoin Mining on Electric Companies
Bitcoin mining, a process demanding significant power, involves solving complex mathematical problems to earn Bitcoin. This practice requires substantial computational power and energy, often leading to illegal activities like electricity theft in countries like Malaysia.
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