Records of the U.S. House of Representatives Bitcoin Mining Hearing: Views of the mining industry, academics, and local governments clash

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2022-01-25 15:16

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At 11:30 U.S. Eastern Time on January 20, the Energy and Commerce Committee of the U.S. House of Representatives held a hearing on cryptocurrencies and their environmental impact. The confrontation between the crowd.

Original source: CoinDesk Record

Compilation of the original text: Colin Wu

At 11:30 EST on January 20th, the U.S. House of Representatives Energy and Commerce Committee held a hearing on cryptocurrencies and their environmental impact. Witnesses included-Cornell Tech professor Ari Juels, Soluna Computing CEO John Belizaire, BitFury CEO Brian Brooks, former Chelan County Utility District general manager Steven Wright and Jordan Ramis shareholder Gregory Zerzan. Although the content of the discussion is simple in the eyes of industry insiders, it can still be seen that there is a confrontation between groups representing different interests. Some excerpts are as follows:

11:42 Rep. Diana DeGette (D-Colo.) begins the hearing by discussing potential use cases for blockchain (energy management, health records) as well as some environmental concerns.

“Our focus now is on reducing overall carbon emissions and increasing the share of green energy on the grid. The unique energy requirements of crypto mining do present potential benefits, although it remains to be seen how these will play out in practice,” she said said in the opening statement.

11:44 DeGette also outlines POW mining and expresses concern about the influx of miners into areas with cheap electricity to take over former coal and aluminum plants.

“A company in upstate New York upgraded previously closed coal plants to run on natural gas … Another company restarted two coal plants in Pennsylvania to generate electricity for its crypto mining operations,” DeGette said, “and now , examples like this are deeply worrying."

11:46 Rep. R-Va. begins his remarks by quickly defining what a blockchain is and commenting on how blockchain networks interact with the grid.

“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 use of bitcoin mining, which could be expensive and time-consuming,” he said.

12:00 Ari Juels, professor of technology at Cornell University, was the first witness to speak, in which he pointed out that Bitcoin is not a blockchain. The rest of his oral testimony focused on defining different types of blockchain systems, how they are powered and what their use cases might be, such as distinguishing smart contracts on ethereum from payments on bitcoin.

“The Bitcoin community deserves our deep gratitude for introducing blockchain to the world. But we have alternatives that are more energy efficient than POW. For the sake of the environment and ours, I believe we need to embrace these new options.”

12:05 "What I want you to remember from my testimony today is that encryption's energy consumption is a feature, not a bug," said Soluna Computing CEO John Belizaire. "(Bitcoin) computing can be a catalyst for the development of clean energy, which will reduce pollution and create local jobs," Belizaire said. He believes that Bitcoin mining can absorb renewable electricity that is stranded or otherwise wasted.

12:12 BitFury CEO Brian Brooks cited data from the Bitcoin Mining Council and the Cambridge Bitcoin Energy Consumption Index as saying that Bitcoin mining uses relatively more renewable energy than the overall US power grid.

“Of the approximately 155,000 TWh of electricity consumed globally for all uses last year, the average source of 188 TWh used by Bitcoin was more sustainable than other uses. The mix of energy used by Bitcoin mining last year, as defined by the International Energy Agency, includes Including wind hydro, solar, nuclear and carbon offsets, sustainable energy is about 58%, compared to 31% for the overall U.S. economy," he said.

12:24 There's been a lot of "blockchain not bitcoin" vibes at this hearing so far. The hearing opened up about the energy needed to power a blockchain network and where that energy comes from. On the other hand, drawing too deep into the distinction may only muddy the overall focus of this hearing. Still, a lot of the hearings so far have focused on the basics of blockchain, identifying what things are and how they work. (CoinDesk narration)

12:28 Rep. DeGette asks Brian Brooks: "Do you agree that proof of work can be wasteful and, very simply, why do you think Bitcoin and these other cryptocurrencies cannot move to POS".

Brooks responded, “It’s clearly not going to waste. It’s an asset that a lot of people are willing to pay for, for various reasons.” When Brooks tried to explain why Bitcoin mining couldn’t move to proof-of-stake, DeGette interrupted him, telling him she Time for questions.

(Note: Lawmakers usually have a certain amount of time to ask questions, usually five minutes.)

12:36 Josh Olszewicz, director of research at Valkyrie Funds, responded to Juels' claim that only four miners can control 51% of the Bitcoin blockchain. In other words, assuming the data hold up, the claim isn't all that crazy. Some four-company combination of Foundry, Poolin, AntPool, F2Pool, Binance Pool, and/or ViaBTC could theoretically control the network.

12:39 Gregory Zerzan, in response to a question from Rep. David McKinley (RW.Va.) about using stranded energy to mine Bitcoin, said that crypto miners often utilize energy that would otherwise be wasted.

"The testimony we heard today accurately states that the wind is not always blowing. We don't always have the sun," Zerzan said: energy is wasted. One of the great things about encryption and processing is that it harnesses energy that would otherwise be discarded in many cases.

12:41 Rep. Cathy Rodgers (R-Wa.), citing a survey that said blockchain jobs grew 395% from 2020 to 2021 while investing $30 billion, asks about long-term blockchain talent What is utility.

12:45 In response to a question from Rep. Rodgers, Wright said he believes Chelan County saw an immature part of the crypto industry back in 2014 and 2015 when the miners started.

"A lot of people come to town, they're well-capitalized, and that creates a fair amount of frustration in the community," he said. The Chelan County Commissioner voted in 2018 to put a moratorium on new miners amid concerns about energy use, public safety and energy costs. Wright further said in Thursday's remarks: "I think there are frank concerns about the potential of decentralized and unregulated currencies, and the overwhelming amount of coverage in the media about all kinds of activity related to cryptocurrencies."

12:52 Rep. Ann McLane Kuster (DN.H.) said that while there are bad actors taking advantage of carbon-intensive mining jobs, there are also industry leaders working to reduce carbon emissions and trade them openly. She asked what innovations in the mining industry could be used in areas other than space.

12.55 Rep. Neil Dunn (R-Fla.) said the best way to eliminate the environmental impact of mining is to bring it to the United States, away from countries like China and Kazakhstan.

1:03 John Belizaire said that last year China banned all crypto-related activities in the country and miners started moving to other parts of the world, mainly North America. After China’s ban, the US accounted for 35.4% of the global hashrate as of the end of August, more than double what it used to be.

1:12 Prof. Juels counters the claim that crypto mining machines are becoming more efficient (and therefore greener): “It’s a highly deceptive claim. Mining rigs are not like light bulbs in our homes, more efficiency means Less electricity. To be clear, individual mining rigs are becoming more energy efficient, but crypto mining as a whole is becoming less energy efficient. This is because rewards and profits are not determined by absolute mining power. From the overall This can be seen in the energy consumption data. The energy consumption of cryptocurrency mining has been growing over time, especially in the past year.”

BitFury's Brooks argues that more efficient machines do actually make the overall system more efficient, since less energy is consumed per mined block.

1:26 In response to a question from Rep. Lori Trahan (D-Mass.) about the viability of proof-of-stake mining, Professor Juels said both proof-of-stake and PoW are viable options for cryptocurrencies, and centralization is a systemic issue, He acknowledged that PoS created a problem of "the rich getting richer".

1:35 Soluna Computing's Belizaire said he couldn't talk about whether jobs across the encryption space had increased by 300%, but did say that many of the data centers his company operates are large and require sophisticated operators.

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