A “poison” for the US? Jack Dorsey and Co. Respond to Mining Allegations

A mudslinging is brewing between leading US Democrats and celebrities from the crypto industry – over the controversial mining of cryptocurrencies. Their outcome could jeopardize the entire industry. Because no country mines as much Bitcoin as the USA.

It consumes too much energy and is torpedoing the fight against climate change, the US Democrats have repeatedly accused. In April 2022, they address the leading environmental agency in the United States with drastic words Environmental Protection Agency (EPO for short). They call for tough regulation of the industry.

Mining should be fair and sustainable

“Cryptocurrency mining is poisoning our communities,” the Democrats write in an open letter to the EPA. Political heavyweights such as Alexandria Ocasio-Cortez are among the more than 50 signatories. One must “hold the fast-growing crypto industry accountable” and “ensure it operates in a sustainable and equitable manner.”

The list of their allegations is long, serious – and well-known. Bitcoin mining consumes as much energy as all of Greece, produces gigantic amounts of e-waste and violates US laws by polluting air and water. There are also complaints from communities about excessive noise pollution from mining farms.

In their criticism, the Democrats refer to studies by researchers worldwide. And at the same time promote an alternative: switching to cryptocurrencies that do not require mining, such as Algorand. They use a different consensus algorithm, Proof of Stake. This would consume “99 percent less energy”. Ethereum plans to switch to this model by the end of the year. You can read here why this is not an option for Bitcoin.

The mining industry responds

Due to its high energy consumption, the “digital gold” is in the firing line of regulators worldwide. In 2021, the People’s Republic of China immediately sent its miners into a mass exodus due to environmental concerns. The EU almost passed a de facto Bitcoin ban in March 2022 for the same reasons – BTC-ECHO reported. Wikipedia and Mozilla also removed crypto donations from their repertoire. The air for miners is therefore getting thinner and thinner.

In the USA they are now firing back – with a reply letter to the EPA. It bears the signature of many prominent cryptocurrency supporters such as Michael Saylor, the controversial founder of MicroStrategy. His company holds the most bitcoin in the world and is currently facing fraud allegations. Ex-Twitter boss Jack Dorsey has also signed. He leads today blockformerly Squareone 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 celebrities want to “correct inaccuracies and enlighten the public,” Saylor said in a tweet that went viral on social media among Bitcoin fans. The miners go through eight central allegations by the Democrats in detail and refute them with their own studies, figures and statistics. And block themselves from any state intervention.

The fact that Bitcoin farms produced masses of electronic waste, for example, was a pure “chimera” and “arose from academic imagination”. This garbage simply does not exist and the researchers would not include any “relevant” industrial data. Many mining companies also rely on renewable energies, 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 set up straw men in their arguments. They point out that Bitcoin farms are not electricity producers, but data centers, such as those of 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 question the studies they cited in the past. This is what Cambridge analysts write in one Report from 2022the global share of renewable energy in BTC mining fell to 25 percent last year – not increased as claimed by the industry.

Debate goes in circles

This example reveals the core problem of the political exchange of blows between miners and regulators. There are hardly any completely independent studies that both sides can refer to. Many statements are based on extrapolations of incomplete data sets. Some miners block themselves from the conviction of any disclosure obligations, for example slush pool, the oldest mining group in the USA. Their ethos: Don’t control your miners, don’t collect data.

Without clear facts, the debate about Bitcoin’s ecological footprint turns in a pointlessly escalating rhetoric spiral. The danger of a hard line of regulation is growing. So far, the EPA has not commented on either letter. But that should only be a matter of time. US President Joe Biden ordered the regulation of the crypto industry in March 2022. The first draft legislation is expected by the end of the year.