The US Senate Committee on Environment and Public Works will hold hearings on digital assets and the environment this week. The hearing will be focused almost exclusively on the Bitcoin (BTC) proof-of-work (PoW) mining process.
Simply put, Bitcoin miners use computers to keep the Bitcoin network secure and process transactions. In return, miners receive bitcoins as a reward.
Critics of the enormous amount of energy (electricity) used by bitcoin miners argue that the government should either crack down on mining or have miners abandon the PoW protocol and operate on less energy-intensive blockchains. .
This criticism misses an important point.
For example, the fact that more electricity is lost in the process of transmission than the Bitcoin network uses in a year. Trying to force governments to crack down on Bitcoin’s energy use or change the way transactions are processed will not only undermine the Bitcoin network, but will also impact energy innovation, the positive environmental impact, and the economic impact in America. You will lose the opportunity.
Driving innovation in renewable energy
Bitcoin has the potential to expand renewable energy. Renewable energy currently struggles with stability, cost and availability in America’s electricity supply. Bitcoin mining can offer a solution to these problems.
Renewable energy such as solar and wind power can only be generated when the sun is shining and the wind is blowing. It becomes intermittent. Much of the electricity from renewables is generated when demand is low and is either wasted or ‘thrifted’ unless the batteries are charged.
Currently, California is likely to curtail 5 million megawatt hours of renewable energy by 2030. This is more than the 36 countries with the lowest energy consumption combined.
Bitcoin miners can buy surplus electricity generated from solar and wind power. It will increase the rate of return for renewable energy and eliminate the need for taxpayers to subsidize power generation.
Bitcoin miners can also smooth out variability in renewable energy generation by participating in electricity balancing services.
This means that miners not only consume surplus power from wind and solar power, but also reduce their energy consumption to near zero when homes, hospitals and other critical facilities and businesses need it most. In states where such balancing is possible, miners sometimes cut back on consumption, helping utilities to provide a stable and low-cost supply of electricity.
Methane gas is also available
Miners are not only good for renewable energy. Methane gas, which is a powerful greenhouse gas and has not been effectively used due to its low economic efficiency, can also be used. Methane gas is frequently released in landfills, abandoned oil fields, and oil and gas operations.
Bitcoin miners can operate basically anywhere, so they can use methane gas to generate electricity and use the electricity for bitcoin mining. There are financial and environmental benefits.
Related article: Nordic’s largest energy company cuts surplus gas in oil fields with bitcoin mining
Former Greenpeace activist and researcher Daniel Batten said, “If we could burn methane gas completely in about 50 medium and large landfills in the US … we could make the Bitcoin network carbon negative.” said.
From use cases like this, it’s clear that bitcoin mining can boost the growth of America’s energy resources while reducing its carbon footprint. Bitcoin mining should be seen as an effective tool for a low-carbon future, rather than an aggravating factor.
Disadvantages of PoS
Despite these benefits, many are putting pressure on the bitcoin industry to move to alternative methods of producing new blocks of transactions, especially proof-of-stake (PoS) mechanisms. .
Instead of using dedicated mining computers, PoS relies on “staking,” a process in which users lock up their crypto assets for a set period of time. Users who stake can earn rewards and contribute to processing transactions and keeping the network safe. But while PoS certainly consumes less energy, it has other problems.
U.S. Securities and Exchange Commission (SEC) Chairman Gensler recently said that all crypto assets other than Bitcoin are securities and are subject to the jurisdiction of the SEC. That statement comes days after the SEC told cryptocurrency exchange Kraken that its Ethereum staking service constitutes the sale of unregistered securities. In response, Kraken paid a hefty settlement and suspended its staking service.
Gensler has commented on other occasions that PoS crypto assets are securities and are subject to the jurisdiction of the SEC. Bitcoin can avoid such problems by maintaining the current PoW mechanism.
The Bitcoin community should continue on its current path, promoting renewable energy, curbing methane emissions, and using underutilized energy to help keep networks safe and power America.
A central mission of the Senate Committee on Environment and Public Works is to reconcile environmental protection with the basic needs of American citizens, such as energy stability. Bitcoin can help make that happen.
With this in mind, we should embrace Bitcoin mining and encourage its growth across America. By doing so, America can lead the world in energy and environmental innovation.
Mr. Denis Porter: CEO of the Satoshi Action Fund, a non-profit organization for Bitcoin mining education in the United States.
｜Translation and editing: Akiko Yamaguchi, Takayuki Masuda
| Image: Anders j/Unsplash
｜Original: Bitcoin Mining Is Good for the Energy Grid and Good for the Environment