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Kuwait’s response to rising power demands
In Al-Wafrah, Kuwait, local authorities have taken significant steps to address the soaring power demands attributed to cryptocurrency mining. Following a crackdown on suspected miners, the region saw a remarkable 55% drop in electricity consumption within just a week. This action comes as Kuwait grapples with a severe power crisis, driven by record-high summer temperatures and increased demand from a growing population. The country’s power grid is struggling to keep up, and many power plants face delays in maintenance, compounding the issue.
The Kuwaiti government claims that illegal mining operations are straining the grid and contributing to frequent blackouts, which have raised serious concerns about public safety and access to electricity. Although trading cryptocurrencies is illegal in Kuwait, mining activities exist in a legal gray area, prompting authorities to step in. The Ministry of Interior has stated that such operations represent an “unlawful exploitation of electrical power,” further justifying their crackdown.
The impact of crypto mining on local power consumption
Crypto mining is known for its significant energy requirements, with a single Bitcoin transaction consuming around 1,047 kWh of electricity—equivalent to the monthly usage of an average American household. In Kuwait, it is estimated that local miners accounted for less than 0.5% of global mining activity in 2022. However, experts point out that even a small share of the total Bitcoin network can have a substantial effect on the relatively limited electricity supply of the country.
Authorities conducted raids across about 100 homes suspected of hosting mining operations, with some households reportedly consuming more than twenty times the electricity of a typical Kuwaiti home. This alarming discrepancy has raised eyebrows and highlighted the urgent need for regulatory measures to ensure energy sustainability in the region.
Kuwait’s energy landscape and the challenge of crypto mining
Kuwait, an oil-rich nation in the Middle East, benefits from relatively low electricity costs due to its abundant fuel resources. This situation has made it an attractive hub for crypto miners, for whom energy expenses are one of the most significant operational costs. However, as the urban population expands and energy demands escalate, these mining operations are increasingly in competition with residential and commercial electricity needs.
The government’s efforts to curb mining activities reflect a broader strategy to ensure that limited energy resources are preserved for essential services and the general populace. Given that cryptocurrency trading is forbidden, it logically follows that the authorities would address mining practices as well.
The larger picture: AI and energy consumption
This incident in Kuwait sheds light on the growing energy demands of high-powered computing systems. While crypto mining is often scrutinized for its energy consumption, it is essential to recognize that data centers, especially those supporting artificial intelligence (AI), can pose an even greater threat to electrical supply. Tech giants like Meta are already facing constraints in their power grids, prompting them to explore alternative energy sources like nuclear reactors to meet their substantial energy needs.
Moreover, even if the power supply can accommodate these demands, the quality of electricity can be adversely affected, impacting local communities by shortening the lifespan of household appliances. Such scenarios emphasize the need for a balanced approach to energy consumption that considers both technological advancements and the well-being of residents.
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Jowi Morales is a tech enthusiast with extensive experience in the industry, contributing to tech publications since 2021, focusing on hardware and consumer electronics.
In related news, Bitcoin miners are reportedly rushing to ship machines before new tariffs are enforced, and some have allegedly profited significantly from mining operations conducted in rental properties. Additionally, Apple anticipates sourcing over 19 billion chips from U.S. factories this year.