Bitcoin Mining Debate Heats up as US Lawmakers Push For More Reporting

Key Insights:

• Six Senators wrote to the EPA and DOE asking them to demand crypto miners report their energy consumption.
• Bitcoin mining operations can be used to balance energy grids.
• A large number of U.S. mining firms use renewable energy.

Late last week, U.S. Congressman Jared Huffman, Senator Elizabeth Warren, and four others sent a letter to the Environmental Protection Agency (EPA) and the Department of Energy (DOE).

In it, they offered “new information” from their own study of cryptocurrency mining. The data was simply a rehash of the same old figures from Cambridge University comparing Bitcoin’s power consumption to a Scandinavian country.

“Our investigation suggests that the overall U.S. cryptomining industry is likely to be problematic for energy and emissions,” they stated.

They demanded that the EPA and DOE enforce company reporting on energy usage and environmental impacts by August 15.

Is the United States of America really concerned over POW mining while we have recklessly gone into a recession with skyrocketing inflation rates and unbearable gas costs?

This is 2022 and our tax dollars are paying their salaries https://t.co/gW9RWshtA8

— WendyO.eth✨ (@CryptoWendyO) July 17, 2022

Is Bitcoin Mining Really That Bad?

In reality, the demand for energy by the Bitcoin (BTC) network has actually fallen 41% since February as miners have been powering down due to bear market profitability concerns. However, the long-term consumption trend is going up as competition increases to mine the remaining few BTC.

Additionally, many mining operations in the U.S. also use predominantly renewable energy sources, especially those based in Texas. Some even buy carbon credits to offset their impact and emissions.

The policymakers also claimed that mining operations were putting pressure on energy grids. This may be the case in some instances, but it has also been refuted by industry experts that are more knowledgeable on the subject than politicians.

On July 17, an industry researcher posted findings that support the concept that Bitcoin mining actually helps to balance a grid, especially on heavy on renewable sources.

🧵THREAD: As energy grids adopt a greater percentage of intermittent renewables, more power must be absorbed by demand response loads. Prices act as signals help balance the grid, #Bitcoin mining profitability responds like noise cancellation technology. /1 pic.twitter.com/r7x6aU4vOK

— Level39 (@level39) July 17, 2022

They noted that excess energy and redundancies always need to be available for power authorities to provide electricity reliably. Deviations in system frequency (60Hz in the U.S.) can occur when energy supply and demand are mismatched, he added. This can damage equipment and cause cascading issues.

Fossil fuel-powered grids were more predictable and easier to balance, but this is not the case for renewables which can be unpredictable if based on natural elements such as solar or wind. Bitcoin mining can act as a controllable load for (PFR) Primary Frequency Response, he added.

Additionally, Bitcoin miners can be powered off and on almost instantly in reaction to demand, which is not the case with other large-scale energy consumers.

“Bitcoin’s usefulness, as a technology to monetize energy, merges perfectly with Demand Response on modern smart grids. Price signals from grid operators are instantly sensed by Bitcoin miners, making them like noise-canceling technology for energy grids.”

Innovative applications

The Bitcoin mining process has clear advantages and can be adapted to support existing infrastructure. So despite the venting of anti-crypto politicians, it is not all bad news.

Former Facebook and PayPal executive David Marcus suggested a different agenda was afoot among U.S. politicians.

Those who oppose #Bitcoin mining on environmental grounds are the same people who opposed nuclear on the same grounds and are now declaring it green after their needs and incentives have changed. Base your own opinion on facts, not popular beliefs or propaganda.

— David Marcus (@davidmarcus) July 17, 2022