LIVE BLOG: Congressional Hearing Puts Crypto Energy Use in the Crosshairs
Crypto mining’s energy use will be in the crosshairs Thursday as the House of Representatives Energy and Commerce Committee discusses its environmental impact. The Subcommittee on Oversight and Investigations will question five witnesses about proof-of-work consensus mechanisms, how crypto networks are powered and what tools or solutions exist to mitigate environmental impacts.
The hearing comes one day after E&E News, a Politico subsidiary, revealed that the Environmental Protection Agency blocked two coal-powered power plants primarily focused on bitcoin mining from continuing to operate coal ash, a “toxic slurry produced from coal power.”
“The profitability of mining and the increase of the value of [proof-of-work] cryptocurrencies over time supports massive investments in mining facilities, which require ever-increasing amounts of energy to power and cool machines,” a hearing memo said.
The witnesses – Cornell Tech Professor Ari Juels, Soluna Computing CEO John Belizaire, BitFury CEO Brian Brooks, former Chelan County Public Utility District General Manager Steven Wright and Jordan Ramis shareholder Gregory Zerzan – will share a range of thoughts in prepared testimony, including endorsements of proof-of-stake consensus mechanisms and questions about the mix of energy sources used to power cryptocurrencies.
12:08 (EG) “Computing can be a catalyst for clean energy development, which will reduce pollution and create local jobs,” Belizaire said. He argued that mines can soak up renewable electricity that is stranded or would otherwise be wasted.
12:05 p.m. ET (AA) “What I want you to remember from my testimony today is that crypto’s energy consumption is a feature, not a bug,” said John Belizaire Chief Executive Officer Soluna Computing.
A great way to start the energy consumption discussion of crypto currencies.
12:04 (CL) Juels concludes by saying: “The Bitcoin community deserves our deep gratitude for introducing blockchains to the world. But we have far more energy efficient alternatives than proof-of-stake. For the sake of the environment and our energy infrastructure in the United States, I believe that we need to embrace these new options.”
12:00 (ND) Cornell Tech Professor Ari Juels is the first witness to speak, opening his remarks by noting that bitcoin is not blockchain. The rest of his oral testimony has been focused on defining different types of blockchain systems, how they’re powered and what their uses cases might be, differentiating between smart contracts on Ethereum vs payments on Bitcoin as one example.
11:57 (ND) The first three lawmakers to speak addressed crypto and the potential benefits and concerns of blockchain. The fourth went on about the U.S. President, his COVID policies, his international policies, inflation and a host of other topics. Hopefully not a sign of what’s to come.
11:53 (AA) A quick market check while the hearing continues. Bitcoin is holding its gains, rising more than 3%, above $43,000 levels. Ether, the native token for Ethereum, gained more than 5%. Meanwhile, the shares of most crypto miners, which are highly levered to the movements of crypto currency prices, are up 5% or more on Thursday.
11:46 (ND) Rep. Howard Griffith (R-Va.) opened his remarks with a quick definition of what a blockchain is and comments on how blockchain networks might interact with power grids.
“The question is, can our current political infrastructure support this level of consumption? Grid operators may need to update their infrastructure to accommodate the energy uses of some matters, which can be expensive and time consuming,” he said.
11:44 a.m. (CL) DeGette also gave an overview of proof-of-work mining and expressed concern about the influx of miners taking over former coal and aluminum plants in areas with cheap electricity.
“One company in upstate New York upgraded a previously closed coal fired coal power plant to run on natural gas… another company restarted two coal fired plants in Pennsylvania in order to generate power for its crypto mining operations,” DeGette said.
“Now, given our current climate objections, objectives, examples like this are deeply concerning.”“New and innovative uses of blockchain technology are being explored every day, and we should continue to try to encourage them,” DeGette said.
11:42 (ND) Rep. Diana DeGette (D-Co.) kicked the hearing off, discussing both potential use cases for blockchain (energy management, health records), as well as what some of the environmental concerns are.
“Our focus now needs to be reducing carbon emissions overall and increasing the share of green energy on the grid. The unique energy demands of the crypto mining industry do present potential benefits, although how these will play out in practice remains to be seen,” she said in her opening remarks.
11:30 a.m. ET (ND) Good morning folks, and welcome to CoinDesk’s live coverage of the House Energy and Commerce Committee hearing on cryptocurrencies and their environmental impact. Titled “Cleaning Up Cryptocurrency: The Energy Impacts of Blockchains,” the hearing seems likely to focus on Bitcoin in particular and proof-of-work more broadly, but I imagine we can expect questions about proof-of-stake and how energy is sourced to pop up.