America is Getting Older and Cryptomining's Electricity-use Spillovers
The U.S. is getting older and a new study sheds light on cryptomining's electricity-use spillovers to the local economy in Upstate NY.
News this week surrounded Census reporting the U.S. median age increased by 0.2 years to 38.9 years between 2021 and 2022 -- no states experienced a decrease in median age. The country has been aging for some time as baby boomers gradually retire and is reported annually. Of note is that baby boomers were the largest living adult population until 2019. While aging population has been linked toward slower economic growth and higher expenditures, there are ways to plan for long-term population trends.
A new study focused on Upstate NY reveals that local businesses and households bear the burden of higher energy costs from cryptomining. By unraveling the electricity demand functions for small businesses and households, researchers uncovered energy consumption by cryptominers led to an additional annual expense of $92 million for small businesses and a staggering $204 million for households in Upstate NY. Local governments may welcome the prospect of more lucrative business taxes, but it's a mere drop in the bucket compared to the mounting costs borne by the community.
America is Getting Older .. but That’s not New
The U.S. Population Is Older Than It Has Ever Been New York Times
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Every Bay Area county is aging faster than the U.S. The Mercury News
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Connecticut has recovered 98% of its March-April 2020 job losses, but never fully recovered from its Great Recession job loss. The Nutmeg State was one of the few, if not the only, state that never recovered all the jobs lost during the Global Financial Crisis (GFC). Compared to Massachusetts that recovered more than 370% of jobs lost, Connecticut lagged its neighbors and the rest of New England. The state’s employment concentration in financial services prior to the GFC contributed to above average losses and a slower recovery. Based on May 2023 estimates, the state is now 1.7% below is 2008 employment peak.
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When Cryptomining Comes to Town: High Electricity-use Spillovers to the Local Economy National Bureau of Economic Research — also presented as a research brief by the University of Chicago.
Cryptomining consumes significant amounts of electricity, leading to higher electricity prices for local businesses and households. A study conducted in Upstate NY examined the electricity market and used Bitcoin prices as a factor influencing the supply curve faced by the community.
By estimating the electricity demand functions for small businesses and households, researchers determined that increased electricity consumption from cryptominers resulted in additional annual costs of $92 million for small businesses and $204 million for households in Upstate NY.
Although local governments in Upstate NY collected more business taxes due to cryptomining, the revenue only partially offset the increased electricity expenses borne by the community.
The findings highlight previously unstudied adverse spillover effects of technology processing on local communities, which should be weighed against the welfare benefits.
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