{"id":401362,"date":"2022-01-30T20:22:00","date_gmt":"2022-01-30T17:22:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/fossils-vs-renewables-pow-vs-pos-key-policy-issues-around-crypto-mining-in-the-u-s\/"},"modified":"2022-01-30T20:22:00","modified_gmt":"2022-01-30T17:22:00","slug":"fossils-vs-renewables-pow-vs-pos-key-policy-issues-around-crypto-mining-in-the-u-s","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/fossils-vs-renewables-pow-vs-pos-key-policy-issues-around-crypto-mining-in-the-u-s\/","title":{"rendered":"# Fossils vs. Renewables, PoW vs. PoS: Key policy issues around crypto mining in the U.S."},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_84 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a25da245514f\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a25da245514f\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/fossils-vs-renewables-pow-vs-pos-key-policy-issues-around-crypto-mining-in-the-u-s\/#Total_energy_consumption\" >Total energy consumption<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/fossils-vs-renewables-pow-vs-pos-key-policy-issues-around-crypto-mining-in-the-u-s\/#Fossils_vs_renewables\" >Fossils vs renewables<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/fossils-vs-renewables-pow-vs-pos-key-policy-issues-around-crypto-mining-in-the-u-s\/#PoW_vs_PoS\" >PoW vs. PoS<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/buradabiliyorum.com\/en\/fossils-vs-renewables-pow-vs-pos-key-policy-issues-around-crypto-mining-in-the-u-s\/#Whats_next\" >What\u2019s next?<\/a><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong># Fossils vs. Renewables, PoW vs. PoS: Key policy issues around crypto mining in the U.S. <\/strong>&#8221;<br \/>\n<img decoding=\"async\" src=\"https:\/\/images.cointelegraph.com\/images\/840_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjItMDEvZDk1NDA3YmMtOWFmYS00MTQ1LWEyYWYtODI0ZmJkMWIyNjE0LmpwZw==.jpg\" \/><\/p>\n<div class=\"post-content\" data-v-128018ef>On Jan. 27, a group of eight U.S. lawmakers, led by Senator Elizabeth Warren, <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.bloomberg.com\/news\/articles\/2022-01-27\/top-bitcoin-miners-pressed-by-u-s-lawmakers-to-detail-climate-impact-power-consumption?sref=323RPL5z\">sent letters<\/a> to the world\u2019s six largest Bitcoin mining companies, demanding to reveal the detailed data on their electricity consumption. This isn\u2019t the first time Senator Warren requested this information from a mining operation \u2014 last month a similar letter was sent to Greenidge Generation, which uses a natural gas plant to power its facility.<\/p>\n<p>These moves highlight the increasing regulatory pressure on crypto mining businesses in the United States. But, as last week\u2019s Congress hearing showed, the growing scrutiny might turn out to be an opportunity to align the mining sector\u2019s development with the broader political push for clean energy. Here are some of the key <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">theme<\/a>s around crypto mining that have captured the lawmakers\u2019 attention and that will likely inform the intensifying policy conversation. <\/p>\n<h3><span class=\"ez-toc-section\" id=\"Total_energy_consumption\"><\/span>Total energy consumption<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>A cornerstone of any environmental critique of Bitcoin and crypto in <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/general\/\" data-internallinksmanager029f6b8e52c=\"3\" title=\"General\" target=\"_blank\" rel=\"noopener\">general<\/a>, the question of how much energy cryptocurrency mining consumes was expectedly prominent at the hearing. In a 2018 <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.nature.com\/articles\/s41558-018-0321-8\">paper<\/a> published in the prestigious journal Nature, a group of researchers predicted that Bitcoin\u2019s growth could singlehandedly push global emissions above 2 degrees Celsius within less than three decades \u2014 not a good look given the international community\u2019s stated mission to prevent the planet\u2019s temperature rise of the exactly same magnitude.<\/p>\n<p><a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/ccaf.io\/cbeci\/index\">Cambridge University Bitcoin Electricity Consumption Index<\/a> set the tone of comparing the yearly Bitcoin-driven consumption to various nation\u2019s levels \u2014 and as for now, with its 131.1 TWh per year the most popular cryptocurrency consumes more energy than Ukraine (124.5 TWh) or Norway (124.3), according to this source. The <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.edisonenergy.com\/blog\/major-changes-coming-to-ethereum-to-lower-carbon-footprint\/\">current estimate<\/a> of Ethereum\u2019s annualized energy footprint by Digiconimist stands at around 73.19 TWh.<\/p>\n<p>None of the most widely cited estimates is beyond dispute, as the recent <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/uploads-ssl.webflow.com\/61d2416d1d63f07ecbfd010c\/61e06fd0387be5288a07d9d6_Climate%20Organizaions%20Crypto%20Letter-01-13-01.pdf\">fact-check report<\/a> by Bitcoin Policy Institute (BPI) suggests. It cited three separate articles from the peer-reviewed Nature Climate Change journal, one of them debunking the 2 degrees argument as \u201cfundamentally flawed\u201d and criticizing its methodology.<\/p>\n<p>Crypto proponents prefer to compare Bitcoin energy consumption not to nations, but to other industries \u2014 in that case, according to the BPI report, BTC\u2019s 0.27% of global energy consumption is less than that of gold mining, although the Cambridge Index sets the two equal.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Fossils_vs_renewables\"><\/span>Fossils vs renewables<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>In the context of the ever-growing political pressure on energy consumption, the search for a sustainable energy framework becomes crucial for any industry that wants to flourish in the digital age.<\/p>\n<p>The critics of the crypto mining industry have recently highlighted several instances of mining operations relaunching the existing fossil power plants. The authors of the <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/static1.squarespace.com\/static\/5e449c8c3ef68d752f3e70dc\/t\/615f1567488c6f6a85de8eee\/1633621351960\/Congressional_Sign_On_Letter_Crypto_Climate_Risks.pdf\">letter<\/a> that some 70 NGOs sent to Congress ahead of the crypto mining hearing called the legislators\u2019 attention to several such instances, like the relaunch of coal waste plants in Pennsylvania by Stronghold Digital Mining and the partnership between Marathon Digital and coal-fired plants in Montana.<\/p>\n<p>There is also evidence that these are not the only American companies buying up the old \u2018\u201cdirty energy\u201d plants to feed their mining operations \u2014 the pattern is observed from<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.theverge.com\/2022\/1\/20\/22893720\/us-congress-hearing-cryptocurrency-energy-bitcoin-mining\"> Texas<\/a> to<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/arstechnica.com\/tech-policy\/2021\/09\/old-coal-plant-is-now-mining-bitcoin-for-a-utility-company\/\"> Missouri<\/a>. At the Congress hearing, it was Steve Wright, a former general manager of Chelan County\u2019s in Washington public utility district, who talked at length about the problem. He explained that miners\u2019 interst in dormant fossil facilities is driven by a simple market mechanism: As renewable energy prices (on the West Coast specifically) grow in line with increasing demand, coal prices drop due to investors\u2019 flight ahead of the upcoming 2025 ban on any coal usage in Washington state.<\/p>\n<p>As Represenatives kept returning to this issue over the course of the hearing, it became clear that the tension between the use of fossil fuels for crypto mining and the industry\u2019s potential shift to renewable energy sources is at the center of policymakers\u2019 thinking on the issue. Witness John Belizaire, CEO of green data centers developer Soluna Computing, argued that there exist scenarios under which crypto mining can shift from a being \u201cdirty\u201d energy concern to a vehicle complementing and empowering the renewable energy sector.<\/p>\n<p>Belizaire\u2019s<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/energycommerce.house.gov\/sites\/democrats.energycommerce.house.gov\/files\/documents\/Witness%20Testimony_Belizaire_OI_2022.01.20_0.pdf\"> core argument<\/a> is that computation-intensive tasks like Bitcoin (BTC) mining can be powered by the recaptured excessive (or, in the industry terms, \u201ccurtailed\u201d) energy otherwise wasted by clean power plants. According to him, solar and wind farms waste up to 30% of generated energy due to incompatibilities with the old energy grids. Belizaire also addressed the\u00a0 problem of energy shortages allegedly driven by crypto miners, highlighting the fact that the kind of computations that miners execute can be stopped at any moment on-demand.<\/p>\n<p>For now, the problem of \u201cdirty mining\u201d is here to stay simply due to the U.S. level of electricity production from renewable sources being below 7.5%. A<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.mdpi.com\/1996-1073\/14\/14\/4254\/htm\"> recent study<\/a> by DEKIS Research group at the University of Avila ranks the United States as the 25th country in the world in terms of its sustainable mining potential, with Denmark (65% of energy generated from renewables) and Germany (26%) leading the chart.<\/p>\n<p>Nevertheless, America remains a safe zone for mining, while many other nations&#8217; electrical grids are less suited to handle additional load. With a reasonable regulatory framework in place, this could be a massive competitive advantage, laying the groundwork for the U.S. to become a global mining haven. Speaking to Cointelegraph, Belizaire explained that there are certain policy steps that can nudge crypto miners to \u201cgo green.\u201d He listed a number of specific measures: \u201cExtended tax credits and special investment tax credits for miners that use green energy and serve as flexible load, along with DOE loan guarantee that is extended to encourage the development of green crypto mining.\u201d <\/p>\n<h3><span class=\"ez-toc-section\" id=\"PoW_vs_PoS\"><\/span>PoW vs. PoS <span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Any discussion of a possible alliance between crypto mining and green energy tends to bump into a Proof of Work (PoW) versus Proof of Stake (PoS) debate, and the recent hearing was not an exception. It was Cornell professor Ari Juels who repeatedly stated that \u201cBitcoin does not equal blockchain,\u201d in the sense that the energy-intensive PoW consensus mechanism is not the only way to enjoy the decentralization advantages of crypto.<\/p>\n<p>And, of course, the number one alternative on the table is PoS consensus mechanism that will possibly be adopted by the Ethereum ecosystem and is currently used in a large number of new blockchain projects. It is also central to the development of smart contract-based technologies such as decentralized finance (DeFi) and non-fungible tokens (NFTs). <\/p>\n<p>Juels\u2019 statements reflect the general pressure that is building up on PoW. Earlier this month, Erik Thed\u00e9en, vice chair of the European Securities and Markets Authority (ESMA), <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.euronews.com\/next\/2022\/01\/19\/eu-regulator-calls-for-a-ban-on-proof-of-work-bitcoin-mining-to-save-renewable-energy\">proposed<\/a> an outright ban on PoW mining in the EU and called for transitioning to PoS due to its lower energy profile. <\/p>\n<p>In the U.S., dominating the global Bitcoin mining market with the 35% share, the issue is way more pressing than in Thedeen&#8217;s native Sweden, where only about 1.16% of BTC is<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/ccaf.io\/cbeci\/mining_map\"> mined<\/a>. However, the real problem lies in the Asia-Pacific region, where, according to the The Global Cryptoasset Benchmarking Study, almost 50% of electricity to Proof-of-Work miners comes from coal.<\/p>\n<p>None of the three experts who spoke with Cointelegraph on the matter see the the juxtaposition of the two consensus protocols as productive. John Warren, CEO of crypto mining firm GEM Mining, noted that there are \u201cslim to none\u201d chances of Bitcoin transitioning to PoS. With that fact in mind, and given Bitcoin&#8217;s status as the biggest cryptocurrency, \u2018the industry should focus its attention on increased adoption of carbon-neutral energy sources versus trying to alter the Bitcoin verification process.\u201d<\/p>\n<p>John Belizaire rejected the idea that the government should support any of the bulletins over another:<\/p>\n<blockquote><p>Congress does not have enough knowledge to make a call on the technical architecture of a global platform that powers billions of dollars in assets [&#8230;] The <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/technology\/\" data-internallinksmanager029f6b8e52c=\"4\" title=\"Technology\" target=\"_blank\" rel=\"noopener\">technology<\/a> community should be the final arbiter of innovation [&#8230;] The POW camp will innovate to solve its problems itself.<\/p><\/blockquote>\n<p>Mason Jappa, co-founder and CEO of mining company Blockware Solutions, remarked that both Proofs have their comparative advantages, but, in echoing Belzaire\u2019s testimony, underscored the compatibility potential PoW networks possess towards renewable energy. In that sense, Jappa sees PoW mining as a &#8220;net positive for society&#8221;: <\/p>\n<blockquote><p>Mining is a perfect complement to the energy grid and is repurposing infrastructure that was otherwise not being utilized, along with providing a use case for building out our energy grid.<\/p><\/blockquote>\n<h3><span class=\"ez-toc-section\" id=\"Whats_next\"><\/span>What\u2019s next? <span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>As Jappa noted, &#8220;It is bullish for the ecosystem that this hearing took place&#8221;, as once again the lawmakers expressed their understanding that cryptocurrencies are here to stay. <\/p>\n<p>Warren specifically appreciated the part of the discussion that \u201cunderscored the ability for the mining industry to innovate more eco-friendly solutions.\u201d We still witnessed plenty of 101 explanations of blockchain technology that reminded of the long way lawmakers should go in terms of their understanding of crypto economy, but, as Warren poined out: <\/p>\n<blockquote><p>It&#8217;s important to acknowledge that there were a number of positive remarks that stemmed from the discussion, showcasing to the nation that mining has created many new jobs and that Bitcoin introduced valuable blockchain technology to the world. That perspective has been largely missing from some of the recent public discourse around crypto mining. <\/p><\/blockquote>\n<p>Besides the obvious need for both the general public and legislators to get better educated on the issue, there are some clear focal points around which the digital mining industry could rally, Belizaire believes. <\/p>\n<p>For example, laws or governmental programs that encourage the use of renewable energy over legacy fossil fuels to power the industry, like \u201cIncentives for job-creating in rural parts of the country where mining operations are set up \u2013 at both the state and federal level.\u201d<\/p>\n<p>Thus, it appears that the green mining card is the one that can present a straightforward economic and environmental argument in favor of the crypto industry, while the PoW\/PoS debate is something that should be reserved for the crypto community rather than regulators.<\/p>\n<\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong>\n<\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/cointelegraph.com\/news\/fossils-vs-renewables-pow-vs-pos-key-policy-issues-around-crypto-mining-in-the-u-s\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;# Fossils vs. Renewables, PoW vs. PoS: Key policy issues around crypto mining in the U.S. &#8221; On Jan. 27, a group of eight U.S. lawmakers, led by Senator Elizabeth Warren, sent letters to the world\u2019s six largest Bitcoin mining companies, demanding to reveal the detailed data on their electricity consumption. This isn\u2019t the first&#8230;<\/p>\n","protected":false},"author":1,"featured_media":401363,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/images\/1200_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjItMDEvZDk1NDA3YmMtOWFmYS00MTQ1LWEyYWYtODI0ZmJkMWIyNjE0LmpwZw==.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74989,74858,74863,78717,74872,75042,77189,75834,52214,70752,70934,8575],"class_list":["post-401362","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-bitcoin-mining","tag-bitcoin-regulation","tag-cryptocurrencies","tag-energy-consumption","tag-green-technology","tag-mining","tag-policies","tag-pow","tag-congress","tag-energy","tag-regulation","tag-usa"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/401362","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=401362"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/401362\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/401363"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=401362"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=401362"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=401362"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}