A mudslide is brewing between leading US Democrats and celebrities from the crypto industry – over the controversial mining of cryptocurrencies. Their result could endanger the entire industry. Because no country extracts as much Bitcoin as the United States.
It consumes too much energy and torpedoes the fight against climate change, the American Democrats have repeatedly accused. In April 2022, they address the leading environmental agency in the United States in drastic terms The Danish Environmental Protection Agency (EPO abbreviated). They call for tough regulation of the industry.
Mining must be fair and sustainable
“Cryptocurrency mining is poisoning our society,” the Democrats wrote in an open letter to the EPA. Political heavyweights like Alexandria Ocasio-Cortez are among the more than 50 signatories. One must “hold the fast-growing crypto-industry accountable” and “ensure that it functions in a sustainable and fair way.”
The list of their allegations is long, serious – and well known. Bitcoin mining consumes as much energy as the whole of Greece, produces gigantic amounts of e-waste and violates US laws by polluting air and water. There are also complaints from local communities about excessive noise pollution from mining.
Democrats in their critique refer to studies conducted by researchers worldwide. And at the same time promoting an alternative: switching to non-mining cryptocurrencies, such as Algorand. They use another consensus algorithm, Proof of Stake. This would consume “99 percent less energy”. Ethereum plans to switch to this model before the end of the year. You can read here why this is not an option for Bitcoin.
The mining industry is responding
Due to its high energy consumption, it is the “digital gold” in the firing line of regulators worldwide. In 2021, the People’s Republic of China immediately sent its miners out on a mass exodus due to environmental concerns. The EU almost adopted a de facto Bitcoin ban in March 2022 for the same reasons – reported BTC-ECHO. Wikipedia and Mozilla also removed crypto donations from their repertoire. The air for miners is therefore getting thinner and thinner.
In the US, they are now firing back – with a reply letter to the EPA. It bears the signature of many prominent cryptocurrency advocates such as Michael Saylor, the controversial founder of Microstrategy. His company has the most bitcoin in the world and is currently facing fraud charges. Ex-Twitter boss Jack Dorsey has also signed. He is leading today blockearlier Square, one of the largest BTC mining companies in the world. She works with Tesla on the ecologically sustainable operation of Bitcoin farms, for example in Texas.
With their letter, the miner’s celebrities want to “correct inaccuracies and inform the public,” Saylor said in a tweet that went viral on social media among Bitcoin fans. The miners review eight key claims from Democrats in detail and refute them with their own surveys, numbers and statistics. And block themselves from any government intervention.
The fact that Bitcoin farms produced lots of electronic waste, for example, was a pure “chimera” and “arose from academic imagination”. This waste simply does not exist and the researchers would not include any “relevant” industrial data. Many mining companies are also dependent on renewable energy, their share of the electricity mix is over 60 percent, more than in most other industries. And would keep growing.
The straw men of the miners
In some cases, however, the miners themselves lined up straw men in their arguments. They point out that Bitcoin farms are not electricity producers, but data centers, like those from Google, Apple and Co. Strictly speaking, these generate neither electricity nor emissions, but draw energy from the grid. It is doubtful whether this makes a difference apart from technical terms.
At the same time, experts are questioning the studies they cited earlier. Cambridge analysts write in a report from 2022 that the global share of renewable energy in BTC mining fell to 25 percent last year – not increased as claimed by industry.
The debate is in full swing
This example reveals the core problem of the political exchange of blows between miners and regulators. There are hardly any completely independent studies to which both sides can refer. Many statements are based on extrapolations of incomplete datasets. Some miners block themselves out of conviction about any disclosure obligations, for example slush pool, the oldest mining group in the United States. Their ethos: Do not control your miners, do not collect data.
Without clear facts, the debate over Bitcoin’s ecological footprint turns into a meaninglessly escalating spiral of rhetoric. The danger of a hard regulation line is growing. So far, the EPA has not commented on any of the letters. But it should only be a matter of time. US President Joe Biden ordered the regulation of the crypto industry in March 2022. The first draft law is expected by the end of the year.
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