US Congressional Group examination of Cryptocurrency Mining Energy UseJuly 16, 2022
Not long after New York instituted a process that could end up in a moratorium on crypto mining, a much bigger legislative body in the country is taking a look at this industry. A group of six Democratic lawmakers recently took a look at the seven biggest crypto mining ventures in the country. They found out that these take up as much electricity as all households in the city of Huston, Texas. That is presently around 6.6 million residents, roughly adding up to a country the size of Bulgaria in Europe or El Salvador in South America. In other words, that is a huge number of households with a very high level of electricity expenditure.
The news of this finding quickly began making rounds across mainstream media but also other social media channels as well. It remains a point of debate on esports forums and other crypto-friendly online locations, but also another fact that the anti-crypto camp can now use as a showcase the wasteful nature of the proof-of-work cryptocurrency networks. But, more worryingly for the US cryptocurrency industry and its mining collectives, the politicians behind the findings remain interested in pushing the same topic further up the legislative and regulatory levels.
The six Democratic lawmakers are led by Sen. Elizabeth Warren of Massachusetts and Rep. Jared Huffman of California. Together, they made the report with the rest of the team and sent it to the Department of Energy (DOE) and the Environmental Protection Agency (EPA), raising the alarm. Their basic request was to ask the same agencies to change their reposting rules for crypto mining companies. These would then require the same businesses to provide a more detailed overview of their energy use and the crucial emissions generating parameters.
Those findings came with a statement, showing the concern of the lawmakers and the level of worry about the future energy use of these mining companies. Tied directly to that is the issue of carbon emissions. In short, while the situation right now is not great, the Democratic politicians believe that it will get much worse if nothing happens that will regulate the same space a lot more tightly and follow its results in a more in-depth manner.
The lawmakers’ report also came with some hard and damning data. The top seven US mining companies have a capacity of 1.04 megawatts (MW) of energy consumption. That is enough to power a city the size of Huson, Texas. But, yet again, the actual near future plans are what is raising even more alarms. In the coming years, the group of miners wants to boost their capacity by nearly 250 percent. That alone would be enough to power 1.9 million households in the US. The lawmakers requested that other agencies take part in the monitoring of these ventures. In the future, they too would be able to wright in on the procedures and their energy conception that the US crypto mining industry has on its ledgers. But, regardless of the future monitoring steps, the data behind the industry is very serious.
In other words, once more, the scale of energy consumption is mind-boggling. From the perspective of the Democratic politicians, the decision to give equivalents in terms of US cities was a smart move. That shows in very simple terms just how hugely power-hungry the same industry actually is and what are the true scales on which its processes take place. Again, powering a population of nearly seven million residents is not a trivial amount of electrical power nor is it a small amount of carbon footprint that comes out of the same process.
The mining industry was never the first to negate the energy-hungry nature of the cryptocurrency proоf-of work networks. However, a group of miners, along with some big crypto and bitcoin investors, decided to respond to the Democrats on this issue. The same group includes Michael Saylor from MicroStrategy and Jack Dorsey from Block and previously Twitter. They stated that the crypto industry is facing a range of misconceptions related to the environmental impact of the same business. These mainly stem not from the notion that bitcoin mining and other crypto mining takes up a lot of energy, but that it has a massive carbon footprint.
That is simply not true, being that the vast majority of crypto energy for mining comes from renewable sources. Energy generation from things like solar, wind, and other renewable sources simply makes more financial sense for the mining conglomerates in the US. The environmental benefits are in the mix as well, which is why in excess of 80 percent of global crypto energy usage comes from renewable sources. Only 20 percent is coming from things like fossil fuels or nuclear plants. That is in sharp contrast to the image of crypto being very wasteful and carbon-generating. Even more conservative estimates of the amount of energy that comes from renewable sources on a global level place it at around 60 percent.
Growth and Efficiency
The answer to all of the crypto mining woes, for many, lies in the migration to the proof-of-stake principles of ming and token generation. However, these networks are still years away from becoming a reality. Also, big networks like bitcoin will continue to use proof-of-work systems. These will not magically go away once ETH 2.0 becomes functional.
Because of that, the true solution for the valid issues that the latest Democratic lawmaker inquiry detected is to allow the bitcoin network to grow, but also to focus on its efficiency. That means adding more renewable sources of electric power to the network and rewarding these not just by better prices for their BTC tokens, but also for more public recognition for the good they are doing in decreasing the carbon footprint of their industry. Shunning the same business will not make it more eco-friendly nor will it decrease the amount of energy it consumes like it has not so far.