Earlier this month, shared correspondence between several Biden administration agencies and Democratic lawmakers revealed their attempts to force Bitcoin miners to disclose emissions. But there are serious questions as to whether they actually have the legal authority and even broader questions as to why.
The letter in question, co-authored by the likes of Senator Elizabeth Warren (D-MA), stated they welcomed input from the Department of Energy and Environmental Protection Agency (EPA) about potentially investigating the environmental impacts of cryptocurrency mining. The lawmakers erroneously claim crypto miners are big polluters. The agencies also appeared receptive to imposing emissions and energy usage disclosures through a “mandatory disclosure regime.”
“It is critical that the EPA and Department of Energy (DOE) rapidly implement this disclosure regime on a mandatory basis. As your staff noted in a briefing on October 17, 2022, EPA and DOE are regulatory agencies that need comprehensive data to determine baselines for emissions and energy intensity, and to develop metrics and benchmarks to measure the effectiveness of environmental performance measures that are under agency consideration,” the letter continued.
The senators also claimed “the urgency of the climate crisis” has accelerated under crypto mining, therefore it “dictates a comprehensive mandatory disclosure and data collection regime.”Suggesting this statement is overblown is an understatement.
This begs the question: does crypto mining “emit” more than other industries? Big Tech, interestingly enough, has a far bigger carbon footprint than the former.
As of 2022, Big Tech production accounts for 2-3% of global emissions. In contrast, American crypto mining only emits, at most, 0.2- 0.3% of global emissions and, at worst, between 0.4-0.8% of domestic emissions. As the Bitcoin Mining Council points out, however, these emissions comparisons are derived from upstream power sources, not directly from end users like the miners themselves.
This explains one reason why, as I previously wrote here at IWF, switching from proof-of-work (PoW) cryptocurrency frameworks to proof-of-stake (PoS) alternatives to reduce emissions has a negligible effect:
The switch from PoW to PoS that they advocate for is premised on the idea that Bitcoin’s energy use will shrink by 99.9% as Ethereum’s did following restructuring. But is it true that Bitcoin’s competitor is more environmentally friendly?
As the University College London’s Centre for Blockchain Technologies’ analysis of Distributed Ledger Technology (DLT) determined ‘the exact energy consumption characteristics of PoS-based systems and the difference between them are not widely understood.’
Broad sweeping allegations against one form versus the other are not supported by the facts and as I also made clear, a recent campaign by Greenpeace suggesting otherwise was “orchestrated misinformation.”
The White House and lawmakers shouldn’t double down on centralized cryptocurrency frameworks. Centralization would drive the industry overseas, likely inviting more FTX collapses, and would discourage domestic crypto mining opportunities.
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