After 23 members of Congress signed a letter to the EPA imploring the regulatory agency to make sure crypto mining did not violate federal environmental regulations, a group of bitcoin evangelists including Block CEO Jack Dorsey responded in a letter Sunday saying that the lawmakers have all wrong.
The letter, sent by California representative Jared Huffman on April 20, condemned the reopening of coal and gas facilities to power crypto mining. The letter also put the lawmakers on one side of the fiercely fought debate between proof of work and proof of stake consensus mechanisms, saying that proof of work was “inherently inefficient.” It cited bitcoin, ether, monero and zcash as examples of proof-of-work cryptocurrencies which caused them concern.
“Cryptocurrency mining is poisoning our communities,” the letter's authors asserted, pressuring the EPA to see whether mining operations in the U.S. violate the Clean Air Act or Clean Water Act.
In their much lengthier response, the group of 55 bitcoin industry supporters picked apart Huffman’s letter point by point. The Congressional letter is plagued by “misconceptions about bitcoin and digital asset mining,” the authors said, and confuses emissions from energy generation with the emissions of mining itself. Bitcoin data centers, the authors argue, are no different than those used by Google, Apple or Microsoft.
The letter goes into painstaking detail, illustrating the different use cases for high-performance computing, emphasizing how little of the energy used to mine bitcoin comes from once-closed gas and coal plants (2%), and explaining that the relative emissions per bitcoin transaction will only decrease with time.
After some time in the technical weeds, the letter delivers an argument that isn’t new to crypto: Many companies try to avoid responsibility for, or obscure, Scope 3 emissions, which the EPA defines as emissions which result “from assets not owned or controlled by the reporting organization, but that the organization indirectly impacts in its value chain.” Amazon, for example, does not report emissions incurred in the creation of products sold by third-party sellers.
Here, crypto leaders are attempting to say that they should not be held responsible for emissions created by power generation facilities they use — even if those facilities are, say, a reawakened gas-powered plant that could blow New York state’s climate goals out of the water.
It’s fairly accurate to say Congress isn’t always up to speed on the inner workings of tech, and that many representatives and senators don’t really get all the ins and outs of, say, crypto mining. But shirking responsibility for carbon emissions isn’t going to help the industry, either. Many blockchain professionals understand this, pouring their efforts into carbon offsets or maybe, eventually, executing that long-awaited Ethereum upgrade.
Perceptions of unsustainability, true or not, are clearly generating ill feelings toward the industry among everyone from creators to gamers to politicians. If crypto wants to get on their good side, it's not clear that letters that lecture Congress about the "education" it requires is the smartest way to go.
Climate TRACE's data show emissions at the facility-level.Image: Climate TRACE