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

A whistleblower is brewing between top US Democrats and crypto industry celebrities – over controversial cryptocurrency mining. Their outcome could jeopardize the entire industry. Because no country mines as much bitcoin as the United States.

It consumes too much energy and torpedoes the fight against climate change, have continued to accuse the American Democrats. In April 2022, they address the United States’ first environmental agency with drastic words Environmental Protection Agency (EPO for short). They call for strict regulation of the industry.

Mining should be fair and sustainable

“Cryptocurrency mining is poisoning our communities,” the Democrats wrote in an open letter to the EPA. Political heavyweights like Alexandria Ocasio-Cortez are among more than 50 signatories. There’s a need to “hold the fast-growing crypto industry accountable” and “ensure it operates sustainably and fairly.”

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 electronic waste and violates US laws by polluting the air and water. Communities also complain about excessive noise pollution from mining operations.

In their criticism, the Democrats refer to studies conducted by researchers around the world. And at the same time promote an alternative: switch to cryptocurrencies that do not require mining, such as Algorand. They use a different consensus algorithm, Proof of Stake. This would consume “99% 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 reacts

Due to its high power consumption, “digital gold” is in the crosshairs of regulators around the world. In 2021, the People’s Republic of China immediately sent its miners on a mass exodus due to environmental concerns. The EU almost adopted a de facto ban on Bitcoin in March 2022 for the same reasons – reported BTC-ECHO. Wikipedia and Mozilla have also removed crypto donations from their repertoire. Air for miners is therefore becoming increasingly scarce.

In the United States, they are now fighting back – with a response letter to the EPA. It bears the signature of many prominent cryptocurrency proponents such as Michael Saylor, the controversial founder of MicroStrategy. His company holds the most bitcoins in the world and is currently facing allegations of fraud. Former Twitter boss Jack Dorsey has also signed on. He now leads blockPreviously Square, one of the largest BTC mining companies in the world. She works with Tesla on the environmentally sustainable operation of Bitcoin farms, for example in Texas.

With their letter, the mining celebrities want to “correct inaccuracies and enlighten the public,” Saylor said in a tweet that has gone viral on social media among Bitcoin fans. Miners examine eight central Democrat claims in detail and refute them with their own studies, numbers and statistics. And block any state intervention.

The fact that Bitcoin farms were producing masses of e-waste, for example, was pure “chimera” and “was born out of academic imagination”. This garbage simply does not exist and the researchers would not include any “relevant” industry data. Many mining companies also rely on renewables, their share of the electricity mix is ​​over 60%, more than in most other industries. And would continue to grow.

Miners’ straw men

In some cases, however, the miners themselves have set up straw men in their arguments. They point out that Bitcoin farms are not generators of electricity, but data centers, like those of Google, Apple and Co. Strictly speaking, these do not generate electricity or emissions, but draw energy of the network. It’s doubtful that it makes a difference outside of technical terms.

At the same time, experts are questioning the studies they have cited in the past. Cambridge analysts write in a 2022 report that the global share of renewables in BTC mining fell to 25% last year – and hasn’t grown as the industry claims.

The debate turns in circles

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

Without clear facts, the debate over Bitcoin’s ecological footprint spirals into an unnecessarily growing rhetorical spiral. The danger of a hard line of regulation grows. So far, the EPA has not commented on either letter. But it should only be a matter of time. US President Joe Biden ordered regulation of the crypto industry in March 2022. The first bill is expected by the end of the year.

Do you want to buy cryptocurrencies?

eToro offers investors, from novices to experts, a complete crypto trading experience on a powerful yet easy-to-use platform.*

To the supplier

Leave a Comment