Why the US Should Reevaluate Its Approach to the Bitcoin Mining Industry
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Bitcoin mining has garnered a reputation for being wasteful and dirty though this couldn’t be further from the truth.
Bitcoin mining can be as ‘green’ as any industry and is an essential aspect of Bitcoin overall.
After Bitcoin mining was banned in countries such as China and others, it caught on in a big way in the US, quickly becoming a major industry with a notable presence in towns across the US.
Cryptocurrency mining the vast majority of which is Bitcoin mining requires between 0.6% and 2.3% of all electricity used in the US.
And globally it requires between 0.2% and 0.9% of all power as much as Greece and Australia.
The carbon footprint of mining in the US is 78.7 million metric tons of CO2 per year. The industry is growing so fast that regulators are moving to understand it better.
The US EIA (Energy Information Administration) moved to require cryptocurrency mining businesses to share power usage details and has considered fines against miners.
The EIA has faced legal obstacles in the wake of a miner-led lawsuit.
Regulators must understand crypto mining can be green
The federal government has made it clear that robust and enforceable regulation is likely coming to the US Bitcoin mining industry, and therefore the community must work together toward reasonable legislation.
The bottom line is simple Bitcoin mining could one day be a net positive for the environment.
Bitcoin’s proof-of-work process has grown increasingly more energy-efficient as more miners look towards renewable energy sources such as wind, solar and hydropower not coal or natural gas.
The Bitcoin Mining Council, a bitcoin industry group, has shown that 60% of mining is done with renewables.
Nonetheless, the US EIA requires cryptocurrency miners to share their power usage details to regulate high power usage. There are only a few ways for miners to respond.
The best way is to make efforts to create zero-carbon emitting mines, while also agreeing to curtail mining activities during emergencies, which would then allow them to potentially function as a buffer of sorts for the grid.
According to Joshua Rhodes, an energy research associate with the University of Texas at Austin, flexible energy loads are good for the grid.
If crypto miners curtail their energy use during peak times, their annual load can be slashed by 13-15%, and could thereby reduce carbon emissions, improve grid resiliency in high-stress periods and foster a shift to renewables.
The importance of Bitcoin mining
Bitcoin fosters financial inclusion and empowers the unbanked.
Bitcoin is an alternative pathway to the financial system, allowing individuals to engage in transactions, savings and even access loans without the need for a bank account or credit history.
Without mining, Bitcoin would be neither secure nor deflationary.
Beyond merely validating transactions and securing the network, Bitcoin miners are increasingly becoming integral components of a broader digital infrastructure.
Their extensive computational resources offer potential for innovative services such as decentralized cloud computing and enhanced cybersecurity measures.
Furthermore, as renewable energy becomes more prevalent in mining operations, these entities could play a pivotal role in promoting sustainable practices within the digital economy.
The increased use of renewable energy not only helps reduce the environmental impact of mining operations but also improves profitability by lowering energy costs in the long run.
Collaborations between miners and renewable energy providers can stimulate economic development in regions with abundant clean energy resources.
As a mobile and flexible demand for electricity, Bitcoin mining operations can stabilize grids by using excess renewable energy that would otherwise go to waste due to storage limits.
Consequently, this unique symbiosis between Bitcoin mining practices and renewable energy advancements fosters a mutually beneficial relationship, promoting sustainability while driving forward technological innovation in both sectors.
The US must embrace crypto mining and regulate it in a sensible manner, which can be done at the policy level.
New industries, much dirtier than crypto, have been regulated by municipalities, states and the federal government while not killing said industry.
The same must be done for Bitcoin and crypto mining, and the Bitcoin community must speak up to make this so.
Kadan Stadelmann is a blockchain developer, operations security expert and Komodo Platform‘s chief technology officer. His experience ranges from working in operations security in the government sector and launching technology startups to application development and cryptography. Kadan started his journey into blockchain technology in 2011 and joined the Komodo team in 2016.
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Author: Kadan Stadelmann
