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With network hash rate at all-time highs, energy-use concerns still plague Bitcoin’s reputation, including among government officials. According to familiar sources, a US congressional subcommittee is preparing a hearing on the environmental impact of Bitcoin mining.
Bitcoin’s Energy Consumption
The Oversight and Investigations subcommittee of the House Energy and Commerce Committee is preparing the hearing, reported The Block on Wednesday. They are preparing a witness roster that can account for energy use as it pertains to proof-of-work Bitcoin mining.
Proof-of-work is a consensus mechanism Bitcoin uses to identify “valid” blocks before adding them to the blockchain. Powerful computers across the world compete to solve a very difficult math problem to ‘mine’ a block. The first to do so receives Bitcoin rewards.
The collective ‘work’ of all of these computers – aka ‘miners’ – expends a tremendous amount of power. Last year, The New York Times found that it uses more energy annually than all of Finland.
Though the list of witnesses has not yet been determined, the hearing could take place by the end of January. Apparently, the broader committee has become concerned over recent events in New York State. Following China’s mining crackdown, much of the network’s hash power relocated there, alongside Texas and Wyoming.
Right now, Democrats have been the primary voices of concern. State lawmaker Anna Kelles has opposed mining in New York since May of last year. Meanwhile, Democratic senator Elizabeth Warren has been scathingly critical of Bitcoin on multiple fronts, including its energy use.
Addressing the Energy Issue
Thankfully, many of the new miners source their energy from relatively cleaner sources than they did in China. For instance, a region in Texas is building a $2.4 billion data center hosting Bitcoin mining, to be powered by renewable energy.
Furthermore, Jack Dorsey and others have launched numerous initiatives to support clean Bitcoin mining. In conversation with Dorsey in May, Elon Musk admitted that he may reverse Tesla’s position on Bitcoin acceptance. This could happen when he would observe an optimistic greening of the network.
Nevertheless, the sheer power Bitcoin uses remains a concern among some groups. Iran recently had to re-outlaw Bitcoin mining until spring, due to rising blackout concerns over the winter.
Many cryptocurrency developers today are opting for a proof-of-stake consensus mechanism to avoid these criticisms entirely. Ethereum – the second-largest crypto – has planned for years to move to proof-of-stake, citing its efficiency.