- The House is set to take an in-depth look into the environmental impacts of Bitcoin mining.
- The Memo cites the data provided by Statista and Digiconomist in arriving at the metrics of energy usage.
- Witnesses include the former acting Comptroller of the Currency and other key players in the field.
As talk about the impacts of cryptocurrency heats up, lawmakers are seizing the initiative to understand the driving factors behind the circulating numbers. Analysts are expecting sweeping legislation to regulate the cryptocurrency mining ecosystem.
The Crypto Hearing
The House Energy and Commerce Committee has slated a hearing titled “Cleaning Up Cryptocurrency: The Energy Impacts of Blockchains amid the rising claims that cryptocurrency mining is inimical to the environment. Particularly this hearing seems to be predicated on the fact that several Chinese miners have increasingly turned their site to the US in the wake of last year’s crackdown.
The US is currently Bitcoin’s largest hashrate provider after it flipped China and environmental rights activists have whipped up a frenzy concerning the environmental impacts of mining activities. Aside from the environmental impacts, the hearing involves consumer impacts as one key witness is Steve Wright, a one-time general manager with the Chelan Public Utility District. Another witness participating in the hearing is Brian Brooks, CEO of the crypto mining firm, Bitfury.
According to the memo, reliance is given to the data from Statista which puts the carbon footprint of a single ether transaction at over 90 pounds of CO2 and one BTC transaction at over 1,000 pounds of CO2.
“Based on estimates of 2021 emissions, ETH mining emitted more than 22 million tons of CO2 and BTC mining emitted more than 56.8 million tons of CO2,” read the hearing memo. “To put this in perspective, the global 2021 CO2 emissions of ETH and BTC mining is equivalent to the tailpipe emissions from more than 15.5 million gasoline-powered cars on the road every year.”
Across the Atlantic, Swedish authorities are proposing a crackdown on proof-of-work cryptocurrencies citing environmental impacts and energy consumption on the grid. US lobbying groups are now beginning to pressure the house to stifle the growth of cryptocurrency mining.
How Are Cryptocurrencies Responding?
In light of the rising questions around environmental impacts, several cryptocurrencies are making the switch to proof-of-stake. Ethereum is one of the big players that have extensive plans to make the exodus from Proof-of-Work in the coming months with things in motion already.
Last year, Ripple’s Chair made a bold proposition to convert Bitcoin’s consensus mechanism to Proof-of-Stake. On the other hand, miners are making ingenious decisions to improve the efficiency of mining by switching to renewable energy forms. El Salvador has pioneered mining bitcoin with geothermal energy while miners are utilizing the flared gas from oil fields into energy to mine Bitcoin.
Bitcoin maximalists have downplayed the environmental issues raised by activists. One noted that Christmas lights utilized more energy than bitcoin mining and that Bitcoin mining used less than 1% of the energy used by the traditional financial institution.
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