Congress Concerned Over Crypto's 'Massive' Energy Needs
The House Energy and Commerce Committee heard witness testimony on crypto’s power consumption, and renewables' role in making the industry sustainable.
The U.S. House Committee on Energy and Commerce held a hearing Thursday centered on crypto mining, the process of computing to obtain a cryptocurrency token like Bitcoin, and how much energy it generates.
“Given our current climate objectives…our focus now needs to be reducing carbon emissions overall and increasing the share of green energy on the grid,” Rep. Diana DeGette, D-Colo., said during the hearing’s introduction. DeGette said that while crypto mining has potential benefits, the energy demands on the country’s electrical grid and the associated hardware waste have a largely negative environmental impact.
Industry leaders who appeared as witnesses suggested that the energy demand of cryptocurrency mining could be a catalyst for expansion into clean energy.
Ari Juels, a professor at Cornell University, emphasized the importance of cryptocurrency’s software platform, blockchain, and its “proof of work” verification process to ensure transaction legitimacy. He conceded, however, that this does require a “massive amount of electricity.”
“For the sake of the environment and our energy infrastructure in the United States, I believe that we need to embrace these newer options,” Juels said.
John Belizaire, CEO of Soluna Computing, argued that how long crypto mining takes and how much energy it needs is overstated.
“There is a misconception that all the machines in these data centers must run 24/7, adding permanent load to a grid system and stealing energy from other consumers,” he said. Belizaire, whose company purchases excess energy generated by renewables to power its proprietary data centers, added that the popularity of crypto mining could spur enhanced development in the renewable energy sector.
“The reality is that if we execute well, computing can be a catalyst for growth in clean energy, a crucial component to meeting our goals of pollution reduction and rural job creation,” he added. A key solution he advocated was modernizing electrical grids to better handle excess energy needs and in turn power advanced technologies like crypto mining.
DeGette pushed back on this notion, asking if cryptocurrency networks opt for the cheapest sources of energy available to power mining operations, which may not be sustainable and could rely on fossil fuels.
Belizaire agreed that participants will search for the lowest costing power, but added that renewable energy sources are becoming increasingly affordable. He later added that the amount of energy consumed by Bitcoin mining in particular has grown along with its mainstream popularity.
Witness Steve Wright, the former CEO of the Bonneville Power Administration, corroborated this perspective.
“I will say I think there are real opportunities here with cryptocurrency production to be used for demand response,” he said. “We have a huge challenge in front of us…[for the] electric utility industry to try to figure out how to make all these variable energy resources work, and we need more demand response, but we don't know.”
Rep. Frank Pallone, D-NJ, voiced concerns regarding the differing estimates seen in studies attempting to calculate how much energy crypto mining consumes and how much carbon that generates.
“It's difficult to assess how big of an issue the industry's power usage presents, if we're using radically different estimates of power consumption,” he said. Pallone also raised concerns about consumers facing increases in utility bills due to data centers running crypto mining operations.
But Rep. Neal Dunn, R-Fla., commented that clean energy infrastructure will have to lead the growth of the cryptocurrency industry.
“Instead of running from technologies that use a lot of power, we should invest in clean and reliable power, like nuclear power and natural gas so that we can meet that, beat that demand,” Dunn said. “We, in part, in Congress have a duty, especially on this committee, to have to a thoughtful approach to the technology we need to understand it, and and importantly, ensure that new laws, new regulations, are done right, implemented well and don't strangle the innovation in this a promising new technology for Americans.”
The hearing did establish, however, the unique ability blockchain technology offers consumers in controlling their data. Gregory Zerzan, a shareholder with the consulting firm Jordan Ramis PC, explained that blockchain and cryptocurrency’s decentralized structure to control the access of their information and assets.
“Individuals own their own data, they control their own data, and they choose if they want to sell it to someone if they want to pass it on to someone,” Zerzan told Rep. Cathay Rodgers, R-Wash. “All of that is under the control of the consumer and no one else can monetize their data. So in many ways that innovation, turning distributed computers into a giant server is one of the most radical and potentially transformative innovations in our lifetime.”
Several witnesses, specifically Juels and Wright, clarified that blockchain and cryptocurrencies are not strictly mutually inclusive.
Brian Brooks, the CEO of BitFury, a crypto computing firm, said that, ethically speaking, the industry has regained focus on decentralizing modern networks and institutions.
“At the end of the day, what it's about is a set of decentralized technologies, starting with Bitcoins that allow people to borrow and lend without the bank credit officer potentially telling them no, but allowing an algorithm to allocate credit…It's about a series of things that we do every day, without the intermediary of a bank CEO, a big tech CEO or somebody else deciding for you,” he said. “Decentralized systems are safer, they're fairer, they're more secure and ultimately more valuable than a centralized set of internet applications.”