Recently, the New York Times has flagged concerns regarding the consumption of energy by crypto miners. It has revealed that miners obtain 85% of their energy from fossil fuels, spewing out carbon emissions equivalent to 3.5 million cars racing down the highway.
However, the report was not very well received by the cryptocurrency lobbyists who argue that the benefits of decentralized finance and the potential for greener energy usage through technological advancements can tip the scales in their favor.
The report emphasizes the urgency of addressing the environmental and economic implications of cryptocurrency mining, calling for a balance between innovation and sustainability. It also adds fuel to the long-standing debate about the environmental sustainability of cryptocurrency mining. Experts argue that the energy-guzzling process casts a dark shadow over global efforts to combat climate change.
Additionally, it highlights the economic effects of Bitcoin mining, particularly in Texas, where high demand for electricity has driven up the price for residential consumers by 5%. As per the report, Texas citizens have to send out an additional $1.8 billion annually for electricity, bearing the weight of Bitcoin mining’s impact.
The crypto advocates and at large the crypto community registered their spite towards this report. The VP of mining company Riot Platforms, Pierre Rochard, stated that there was “lots of fictitious fractional-reserve carbon accounting” and “cooking the books to fabricate emissions.”
Others in the crypto industry also joined in on the criticism, implying the study was poorly organized and used unfair characterization of some aspects of the industry.
Cryptocurrency mining has been a controversial issue for years as the process demands enormous amounts of energy to crack complex mathematical puzzles and validate transactions on the blockchain. The huge consumption of energy by miners has ignited concerns about the carbon footprint left behind by Bitcoin and its potential role in fueling climate change.
Sources reveal that the report comes in the wake of the US growing its presence in the mining industry. Following the ban on crypto mining placed by China, the industry registered an increase in interest in the US. Texas, in particular, has become a hotbed for the industry, with state-level legislation also favoring the industry.
Crypto mining has been on the table for discussions by regulators around the globe. Several regions in the United States have registered no tolerance towards mining activities. One such region is New York, which has banned crypto mining for two years.
However, in large, the lawmakers in the US have also been found to be divided on the matters of crypto regulation as well as mining. For example, a lot of Democrat lawmakers have been found to be anti-crypto.
In February, Democrat lawmakers namely Senators Elizabeth Warren, Sheldon Whitehouse, Ed Markey, Jeff Merkley, Dick Durbin, and Representatives Jared Huffman, Katie Porter, and Rashida Tlaib wanted a disclosure regime for the crypto mining firms. The lawmakers wrote a letter to the Department of Energy (DOE) and the Environmental Protection Agency (EPA) to accelerate their plans to require crypto-mining companies to report their energy consumption and emissions.
Recently, the U.S. Treasury Department in their budget proposed a 30% excise tax on the cost of powering crypto mining facilities. According to the proposed budget, a provision would create a phased-in excise tax based on the costs of the electricity used in crypto mining, imposed on the companies “using computing resources” to mine cryptocurrencies. Additionally, the mining companies would be required to report how much electricity they use and what type of power was tapped