A recent report by The New York Times has unveiled a series of apprehensions regarding potential national security threats associated with Chinese-operated Bitcoin (BTC) mining facilities located within the United States.
At the epicenter of this unease is a crypto-mining facility situated in Cheyenne, Wyoming, which has triggered concerns due to its close proximity to a Microsoft data center providing support to the Pentagon and an Air Force base responsible for nuclear-armed intercontinental ballistic missiles.
Growing Presence of Chinese Bitcoin Mining Operations in the US
The report reveals that Microsoft’s national security threat assessment team has voiced deep reservations about the likelihood of “full-spectrum intelligence collection operations” being conducted by the Chinese entity in such a strategically significant locale.
Following this warning from Microsoft, unnamed US government officials disclosed that they had been closely monitoring the mining operation in Wyoming for several months. While measures have been enacted to counteract potential intelligence collection activities, specific details were not divulged. The mining company cooperated with inquiries from the federal investment committee.
The Wyoming case serves as an illuminating example of a broader trend: the proliferation of Chinese-owned Bitcoin mining operations across the United States. This expansion has sparked concerns and amplified security apprehensions.
Beyond concerns related to intelligence gathering, these mining operations, which consist of extensive warehouses or containers teeming with specialized computers, impose substantial stress on local power grids. These mining computers operate continuously, consuming vast quantities of electricity while engaged in the process of “mining” digital currencies, most notably Bitcoin.
Brian Harrell, the former assistant secretary for infrastructure protection at the Department of Homeland Security, has cautioned that if these mining operations were to collaborate in causing disruption, they could place an “enormous stress” on the power grid, potentially leading to targeted blackouts or cyberattacks. Harrell emphasized that any Chinese infrastructure capable of affecting critical energy systems should trigger additional investigation and scrutiny.
The investigative report by The New York Times has identified Chinese-owned or operated Bitcoin mining facilities in at least 12 states, including Arkansas, Ohio, Oklahoma, Tennessee, Texas, and Wyoming. In aggregate, these mining facilities consume as much energy as 1.5 million households. The Cheyenne, Wyoming facility alone, when operating at full capacity, demands enough electricity to power 55,000 homes.
Bitmain Controversy
A notable portion of these mining facilities employs computers manufactured by Bitmain, a Chinese company seemingly unconnected to Chinese authorities. Nevertheless, import records suggest that Bitmain has sent shipments to the United States through a subsidiary associated with the Communist Party in southern China.
Since China’s ban on Bitcoin mining in May 2021 due to concerns about energy consumption and economic stability, Bitmain has seen a fifteen-fold increase in equipment shipments to the United States compared to the previous five years. According to The New York Times, the company claims to control 90 percent of the global market for Bitcoin mining equipment.
In summary, the surge in Chinese-controlled Bitcoin mining operations within the United States has prompted significant concerns among US authorities related to national security and energy infrastructure. As of the time of this report, the price of BTC stands at $26,700. Over the past week, the leading cryptocurrency has experienced a sideways price movement, following the loss of the pivotal psychological level of $27,000 for bullish investors, resulting in a 3.4% decline.
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