Crypto miners should report more information on energy use

The government must intervene to limit the impact of cryptocurrency mining on climate change, several Democratic U.S. senators and representatives of the Biden administration said in a letter Friday.

Based on responses from seven of the largest crypto mining companies they surveyed for information on their climate impact, lawmakers asked Environmental Protection Agency Administrator Michael Regan and Department of Energy Secretary Jennifer Granholm to demand more energy use reporting from these companies. They argued that the current lack of reporting requirements limits the authorities from understanding the extent of negative impacts from crypto mining on the environment.

Sens. Elizabeth Warren, D-Mass., Sheldon Whitehouse, DR.I., Edward Markey, D-Mass., Jeff Merkley, D-Ore., And Representatives Jared Huffman, D-Calif., And Rashida Tlaib, D-Mich., everyone signed the letter.

Crypto mining is the process by which new cryptocurrencies are created. Bitcoin and ether, the two most popular cryptocurrencies, currently use a process known as “proof of work”, in which networks of computers solve increasingly difficult mathematical problems to create each new currency unit. (Ether is about to switch to another method.) The idea is to enforce relative scarcity of new coins to keep prices stable, while validating transactions in a way that cannot be easily counterfeited.

But the process uses a lot of energy, and has received criticism from lawmakers who are concerned that it contributes to global warming and higher energy prices. The legislature in the state of New York recently passed a bill to ban new outfits for crypto mining unless they use 100% renewable energy, even though the governor has not yet signed it into law.

Lawmakers said they did not receive complete information in response to their questions, “but the information they provided reveals that these companies’ mining operations are significant and growing, have a major impact on climate change, and that federal intervention is needed.”

The group found that the six of the seven companies alone – Greenidge, Riot, Bitdeer, Stronghold, Marathon and Bit Digital – have developed almost enough capacity to operate all homes in Houston, Texas. They said the seventh company, Bitfury, did not include information on energy consumption in its response.

They also found that this sample of companies plans to increase the total mining capacity by almost 230% over the next few years, which will represent “enough new capacity to run a city with over 1.9 million homes,” according to lawmakers.

“The results of our survey, which collected data from just seven companies, are disturbing, with these limited data alone revealing that cryptocurrencies are large energy users that account for a significant – and rapidly growing – amount of carbon emissions,” they wrote. “Our study suggests that the general U.S. cryptocurrency industry is likely to be problematic for energy and emissions.”

The EPA and the Department of Energy did not immediately respond to requests for comment.

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