Crypto mining has exploded in the United States over the past few years, and we are only just beginning to understand how this boom is affecting our infrastructure, our environment, and our daily lives. As the United States has become the biggest hub for Bitcoin mining, for example, crypto mines have revived struggling fossil fuel power plants and driven up electricity bills.
We finally got a clearer picture of the fallout from US crypto mining last week when the White House’s Office of Science and Technology Policy (OSTP) released a report on the industry’s impact on mining. energy and climate change. The analysis estimates that crypto industry operations in the United States pump out roughly as much greenhouse gas pollution each year as all the diesel fuel used on the nation’s railroads, or 25 to 50 million metric tons of carbon dioxide per year.
The report also gave us insight into actions the Biden administration is considering to avoid bigger problems with crypto mining. To learn more, The edge spoke with Costa Samaras, Senior Deputy Director for Energy and Senior Advisor for Energy Policy at OSTP.
This interview has been edited for length and clarity.
As part of the Paris Agreement, the United States has engaged reduce greenhouse gas emissions by at least 50% below peak levels by 2030. Global greenhouse gas emissions must achieve net zero by 2050 to achieve the goals of the Paris Agreement. Does the growth of energy-intensive crypto mining operations in the US threaten climate goals?
Anytime we have an emission source that is moving away from zero and not approaching zero, that’s something that’s going to make it more difficult to meet our emissions goals and targets. The biggest concern of this industry is its ability to grow rapidly. Now, that doesn’t mean it will keep growing fast. But the ability to scale quickly is something worthwhile for all involved stakeholders to understand the problem and find a solution.
In the report, we say that depending on the energy intensity of the technology used and the carbon intensity of the network, crypto asset mining could hamper broader efforts to reach net zero. So I want to be clear that technology matters, the type of electricity matters, and that there are ways to drive innovation to get to the net zero emissions that allow us to meet our climate goals.
Much attention is paid to energy consumption and greenhouse gas emissions. But this report goes beyond that and examines other impacts on the ground for Americans. What are your concerns about local crypto mining?
It is very important for the Biden-Harris administration to improve environmental justice during this energy transition. The administration wants to ensure that as new innovations and emerging technologies are adopted, communities that have had cumulative burdens over time do not see additional challenges and see their communities improve. improve rather than become more burdensome.
One of the things crypto asset mining can potentially affect is a local community. This is due to noise from operations, or it can come from direct air or water pollution from all energy sources used in the local area. And this could potentially be due to the increase in electricity prices that has been seen in some parts of the United States. And we believe there are proven steps that all stakeholders involved could take to ensure that local communities are not affected.
Thus, the report sets out a set of recommendations. The first concerns information and transparency.
What the report revealed is that crypto asset operations use around 0.9-1.7% of the total electricity in the United States. The reason this range is so large is that there is not much interesting information about the use of electricity by crypto assets in the United States. And what’s important is that we focus on getting better insights to find and anticipate small problems before they become big problems. This amount of electricity is similar to all computer usage or all residential lighting. And when we have the potential for very, very rapid growth in electricity consumption, we want to make sure that doesn’t affect consumers. We want to make sure the grid stays reliable and we want to make sure greenhouse gases can go to zero.
Some of the other steps include the ability for the federal government to provide technical assistance to state and local environmental agencies and communities as crypto asset mining operations ramp up to find ways to ensure these local impacts do not not get worse.
The report mentions that if some of these early collaborative measures “prove ineffective in reducing impacts, the administration should explore executive actions” – how long before beginning to explore executive actions?
“There is no set timetable. But we are in a climate crisis.
There is no set timetable. But we are in a climate crisis. And the administration has been very clear that bold climate action is needed, and bold action is what we are taking. We believe there is a great opportunity for innovation and best practices to explore common sense ways to reduce the environmental impacts of crypto assets.
fair ethereum away from proof of work consensus mechanism, which is responsible for much of this energy consumption and greenhouse gas emissions, to proof-of-stake, which cut drastically as energy consumption and pollution. Do you have any expectations for what this kind of transition could mean for the crypto industry?
We want to understand how technological changes like this affect energy consumption, and that’s one of the reasons why additional transparency will be helpful across this industry.
We follow all developments in this wider industry. One of the recommendations of this report was to explore ways to adopt low-energy consensus mechanisms, including things like proof-of-stake. It is important for the whole industry, regardless of the consensus mechanism ultimately used by the various stakeholders, to aim for the lowest possible energy intensity and the lowest greenhouse gas emissions.
Would you like to see Bitcoin move away from proof of work?
We have no position on individual technologies. Our position is about results: achieving net zero greenhouse gas emissions, not increasing impacts on communities and maintaining the reliability of the electricity grid. And I think when we start from these principles, rather than dictating the technological paths, we will see much better results.