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On January 20, the U.S. House of Representatives Energy and Commerce Committee Oversight and Investigative Subcommittee held a hearing to investigate the environmental impact of cryptocurrency mining. Although narrowly focused, the ensuing conversation — which many industry experts see as a meaningful educational experience for lawmakers — touched on a range of blockchain-related issues and topics beyond energy consumption. Here’s how it came down and what’s next.
Witnesses set the frame
After the opening remarks, the hearing officially kicked off witnesses testify. Bitfury CEO Brian Brooks pointed out that it is up to the market to determine the most efficient way to use the energy produced, insisting that proof-of-work (PoW) is the best place to produce a truly decentralized consensus mechanism. blockchain network.
In contrast, Cornell Tech professor Ari Juels is evaluating blockchain technology and Bitcoin (Bitcoin) In particular, he argues that proof-of-work is unnecessarily wasteful, while the shortcomings of alternative proof-of-stake or PoS mechanisms are largely theoretical.
John Belizaire of Soluna Computing said Bitcoin’s energy consumption should be considered a feature, not a bug, as crypto mining can be made more efficient by using excess renewable energy. Steve Wright, former general manager of the Washington State Utilities District, shares his experience interacting with crypto miners who have flooded the region because of the abundance of cheap electricity, while Gregory Zerzan, former acting assistant secretary of the U.S. Treasury Department, describes multi-purpose blockchain technology , and said regulatory uncertainty could hurt its development.
Delegates then spoke and asked questions. A few used their time to engage in partisan attacks and political grandstanding, but the majority made an honest effort to ask questions, either addressing the energy-related issues at the heart of the hearing or seeking context for broader blockchain technology use and potential applications.
Dig deeper into cryptocurrency mining
Committee Chair Frank Pallone and Oversight Subcommittee Chair Diana DeGette questioned witnesses about the real waste of cryptocurrency mining and how to ensure the community does not bear the cost of increased energy consumption caused by miners. Congresswoman Jan Schakowsky expressed her concerns about the use of fossil fuels to power mining equipment. Witnesses responded by reassuring lawmakers of the overall green trend that is developing in the mining industry, especially in the United States.
Some delegates sought a better understanding of the efficiencies generated by cryptocurrency mining to determine whether they justify the associated energy use. Congresswoman McMorris Rodgers asked about the ability of the larger blockchain industry to create new jobs and protect user data.
Florida representative Neal Dunn showed some advanced knowledge of Bitcoin economics when he asked Brian Brooks about the relationship between the BTC halving and mining efficiency. Dunn also said that countries need to produce more energy no matter what, and powering innovative industries like crypto mining is a good use of this growing capacity.
Congressman Morgan Griffith explored the geopolitical issues of Bitcoin mining and concluded that China’s mining ban was not primarily motivated by energy efficiency concerns, but rather the Chinese government’s dislike of the idea of decentralization. The exchange with Gregory Zerzan led witnesses to point out that “Bitcoin equals freedom, and there are many parts of the world that don’t like freedom.”
Industry reception
While the hearing was not seen as a major breakthrough, most industry observers highlighted the educational component of the exchange and its role in driving policy conversations around cryptocurrency mining.
In an interview with Cointelegraph after the hearing, witness John Belizaire stated that the willingness of committee members to thoroughly explore the complex issues at hand made the discussions productive:
“Chairman DeGett set the right tone from the start, ‘we are here to learn.’ Delegates asked great questions and wanted to be educated on them.”
Belizaire added that he was surprised by some of the issues related to the possibility of using less environmentally friendly energy sources to power bitcoin mining in the future, saying, “You have to put this in the context of the global movement against climate change. .”
John Nahas, vice president of business development at Ava Labs, the company behind the smart contract platform Avalanche, noted that the hearings started slowly and eventually morphed into “meaningful conversations.” Nahas commented:
“It’s clear to me that lawmakers are seeing value in blockchain. It’s refreshing to see them understand so many areas, from medical records to energy management, that will make our lives more efficient and secure.”
John Warren, CEO of U.S. bitcoin mining firm GEM Mining, said the hearing was “an important step in educating U.S. lawmakers about the benefits of the fast-growing cryptocurrency industry, and mining in particular.”
Consistent with Belizaire’s testimony and comments made by some representatives, Warren argued that shifting mining activities to the United States is a favorable scenario in terms of reducing the industry’s environmental impact:
“Increased oversight in the U.S., coupled with continued innovation, will ensure U.S. companies take the lead in taking steps to operate as efficiently as possible, further reducing the environmental impact of mining.”
policy impact
While this hearing was nothing particularly groundbreaking, the effects of this interaction between Congress and industry tend to intensify. Over time, it is important that elected officials on different professional committees — not just those engaged in financial oversight — be exposed to rhetoric and arguments that support the blockchain industry.
In the short term, however, this interaction should not be expected to lead to any concrete legislation.
Nahas of Ava Labs commented:
“This is mostly informative and the early stages of any policy process. However, policymakers should continue to work with experts and objective sources to better understand emerging blockchains and their access to data while consuming only a fraction of the evidence. A Billion Dollar Capability-Job Chain.”
Still, arguments around decentralization, the dangers of over-regulating the crypto space, and the kinds of efficiencies that blockchain technology can generate, at least some of those in the hearing will stick, adding to their long-term policy vision.
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