Specifically, the Energy Information Administration (EIA), a statistical agency under the Department of Energy, has announced that starting next week and for the next six months, some U.S.-based miners will be We plan to investigate the amount of electricity used.
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Given the language of the “emergency” order and the current administration’s critical stance on cryptocurrencies, many wonder if the information collected will be used to inform policies that could be detrimental to the mining industry. is concerned.in The public applicationEIA cites the following possibilities: “Pollution” From cryptocurrency mining for data collection.
“EIA is a policy-neutral agency and does not create policy, implement policy, enforce policy, or comment on policy,” EIA spokeswoman Morgan Butterfield said in an email. “The results of the data we have collected will help inform our future direction regarding three-year periodic authorizations over the next six months,” he told CoinDesk in a response.
However, being policy-neutral does not necessarily mean that research does not influence policy. By simply conducting this study, the EIA is asking questions about the larger purpose of Bitcoin and whether it benefits society, and there is good reason to believe that they already have the answers in mind.
For example, the justification for the emergency order granted by the Office of Management and Budget was the recent rise in crypto prices, with Bitcoin rising more than 50% in a few months, and the EIA said this could lead to “more crypto mining activity. will be encouraged.” As a result, power consumption increases. ”
“Given the emerging and rapidly changing nature of this issue, and the inability to quantitatively assess the potential for public harm, EIA relies on reliable data to provide insight into this evolving issue. “There is a sense of urgency in generating new products,” the report said. Butterfield said 82 companies operating approximately 150 facilities were selected to represent the “world of crypto companies” across the country.
The agency cited the cold snap that hit Plattsburgh in 2018 to justify the risks that cryptocurrencies pose to the public. “The combined impact of increased cryptomining and power system stress will increase uncertainty in electricity markets, resulting in demand peaks that could impact system operations and consumer prices. “Yes,” the report says.
Since then, New York State has imposed a two-year moratorium on the opening of new crypto mining facilities unless they are powered entirely by renewable energy. Texas, which benefited greatly after China passed a nationwide crypto mining ban, is also looking to slow down its mining industry. Cryptocurrency miners in Texas work directly with state-owned power grid operators and are paid to turn off power during peak demand or moments of stress on the network.
To be fair, Public version According to the survey results, EIA asks mining companies fairly routine questions, such as how many types of chips they run, how much electricity their facilities use, and how much money goes directly into mining. It is shown that
“We focused specifically on how the energy demands of crypto mining are evolving, identifying high-growth geographic regions and identifying the power sources used to meet the demand for crypto mining. Quantify,” the agency said in a statement. statement. The report will be submitted on the last Friday of the month until the end of July and may be updated thereafter.
Furthermore, there is an argument that such high-level statistics benefit the country and the industry because they are first-hand and more detailed information.
Currently, the best data we have on the mining footprint comes from the Cambridge Bitcoin Electricity Consumption Index. Hypothesis lower and upper bounds An estimate of the daily energy consumption of the Bitcoin network, essentially by extrapolating from the current hashrate.
However, you need to think about why you are conducting a survey now. Why did the recent spike in Bitcoin prices cause an emergency, but not others? The Biden administration is prioritizing reducing the country’s carbon footprint. is noteworthy. And Sen. Elizabeth Warren (D-Mass.), a critic of cryptocurrencies, called on federal regulators to force crypto miners to disclose their emissions and energy use.
Bitcoin mining is likely to become a popular topic of discussion in the media in the lead-up to the halving event, which will programmatically reduce the “Bitcoin subsidy” paid to miners every four years. It is not yet clear how the halving will affect the mining sector, other than putting inefficient mining equipment out of service in the short term.Some people have high hopes for cryptocurrencies Carbon emissions will increase Some believe it will shrink in size over the next few years.
Additionally, certain public incidents have occurred in recent months. calculation Bitcoin’s environmental costs, especially after the second largest network, Ethereum reduced energy consumption by 99% with a single upgrade. While some groups like Greenpeace want Bitcoin to abandon energy-intensive mining, others are beginning to see the sector as a boon to the environment.
For example, the University of Cambridge recently revised downward its estimates of Bitcoin’s annual energy use, and institutions such as MIT and KPMG believe that the network will help “balance” the power grid, subsidize renewable energy development, and improve the economy. released a report claiming that it has the potential to help green the world.
Mining is an energy-intensive process. Proof-of-work (POW), the cryptographic algorithm that Bitcoin runs, is used by computer scientists to curb spam, Sybil, and denial-of-service (DoS) attacks on networks by adding costs to interactions. Designed by Server usage is usually calculated in the form of computer processing time spent solving mathematical puzzles.
Some observers who oppose the mining process often describe Bitcoin mining as “wasted” energy, but this is not the case. Energy is consumed intentionally as a kind of token or form of evidence. The problems Bitcoin miners race to “solve” are meaningless in that they don’t add to human knowledge or contribute something productive. Fold at @homeBut it’s worth it to protect your network.
And that’s the hard part: valuing Bitcoin. What is Bitcoin worth? The standard reaction is to see how the market values it. At the time of this writing, it’s about $42,000. However, most of the actual discussion surrounding Bitcoin’s huge energy footprint has little to do with Bitcoin’s price. Rather, it focuses on the costs and benefits of Bitcoin.
I wish I could say that EIA research can help us better understand these costs and benefits. However, the study authors appear to have already answered their own question about whether Bitcoin poses a risk to the general public and are looking for data to support that conclusion.
