The White House’s cryptomining report is drawing praise from advocates and critics alike
The Biden administration’s new findings about bitcoin (BTC) mining’s environmental impact united industry advocates and critics: Both sides declared that their views had support from the highest levels of the US government.
On Thursday, the White House Office of Science and Technology Policy (OSTP) released a much-anticipated 45-page report on bitcoin (BTC) mining. It outlined the pros and cons of the industry’s impact on the environment and energy grid, and called for more research so federal agencies can come up with standards to minimize harm.
If these measures prove ineffective, the report says, the administration and Congress should consider limiting or eliminating energy-intensive technologies such as proof-of-work, the system that powers the Bitcoin blockchain and, for now, Ethereum.
Bitcoin mining in particular has faced criticism for energy use and carbon emissions, but the industry has argued that it can actually support the world’s transition to renewable energy.
Read more: Can crypto miners make the world greener?
Two sides of the same story
Advocates said the report highlights the positive potential of bitcoin mining, while critics noted that the OSTP sought to debunk some of the miners’ arguments.
“Every major bitcoin influencer going on national TV should hammer home the point that the White House report found that PoW mining could have positive results for climate change,” tweeted Joe Carlassare, who leads the Cryptocurrency, Blockchain and FinTech group at the law firm SmithAmundsen.
The White House report said that bitcoin mining “can be good for the environment” and are “incredible progressDennis Porter, who advocates for bitcoin mining as co-founder and chairman of the non-profit Satoshi Action Fund, said on Twitter. He posted parts of the reports that said crypto mining could be used to capture otherwise vented methane to support his statements.
On the other side of the debate, the Environmental Working Group (EWG), a non-governmental organization (NGO) that has advocated changing the Bitcoin network code to reduce energy consumption, has also praised the report.
“Today’s report confirms that digital assets use a significant and growing amount of electricity, contributing more climate pollution,” it said in a statement on its website.
Alex de Vries is one of the industry’s most vocal critics and has argued that bitcoin mining is a “dirty” industry that contributes to global emissions and waste, in research strongly disputed by the industry. He tweeted that the report actually “dismantles most of the beloved talking points from bitcoin influencers.” Research from de Vries was cited in the report.
For example, the section on methane flare-powered mining “immediately takes aim at a bitcoiner favorite: ‘Mining that replaces existing methane flares is unlikely to affect [carbon dioxide] emission,’” de Vries so.
The middle ground
Others saw the White House’s position in the report as more of a middle ground approach that is still taking shape
The report was praised by some mining industry insiders and experts for its research, particularly in how it assessed the potentially climate-positive effects of flared gas mining and how it could support the development of renewable energy.
OSTP produced a report that showed “a nuanced understanding of the implications of #crypto for climate and energy,” tweeted Jesse MorrisCEO and founder of Energy Web, a company trying to build transparency around mining’s energy use.
Elliot David, who is the head of sustainability engagement at the Sustainable Bitcoin Protocol (SBP), said that “the bulk of the report” is “quite positive.” It signals that regulators want to learn more “and are willing to work directly with the industry as they have with other sectors, which is all we’re asking,” he said.
Troy Cross, professor of philosophy and humanities at Reed College in Portland, Oregon, and fellow at the Bitcoin Policy Institute, tweeted that while the report may look bad, it shows that the Biden administration is trying to gather all the data necessary to make sound policy.
It “represents a shift in a very good direction that responds to the truth,” as opposed to the “fear mongering” of previous policymakers’ grip on the industry, such as the letter sent to the Environmental Protection Agency by Rep. Jared Huffman (D) -Calif.) and Sen. Elizabeth Warren (D-Mass.) in July, Cross said.
The report also lays out what concerns the administration, which makes miners’ jobs easier, Cross said: “We show that the concerns are unfounded. We tick all the boxes.”
“Once this issue is fully studied and the rhetoric begins to fade, it will become clear that proof-of-work mining is a boon for resilient, abundant, renewable energy,” Rachel Silverstein, general counsel and senior vice president of compliance at bitcoin miner CleanSpark (CLSK), told CoinDesk.
Silverstein added that the firm looks forward to working with the White House to set standards for the industry.
New York-based bitcoin miner Bit Digital’s chief strategist, Samir Tabar, said the company applauds “the administration’s ambition to combat climate change” and acknowledged there have been “growing pains” as the industry has boomed in the US. parts of the report must be “myopic”.
OSTP did not mention the “overall benefits” the industry can bring to communities, such as jobs, and that increased energy use, which the report found problematic, “is often a precursor or prerequisite to economic development.”
“We strongly support regulating the less environmentally friendly aspects of the industry, but good intentions must be fully informed and carefully balanced to provide effective policy,” Tabar said.
Read more: The End of the Texas Bitcoin Mining Gold Rush
The setback
However, mining insiders took issue with other aspects of the report, including the possibility of banning the consensus algorithms that underpin bitcoin mining as it currently exists.
If the standards “prove ineffective in mitigating impacts, the administration should explore executive action, and Congress may consider legislation, to limit or eliminate the use of high-energy-intensive consensus mechanisms for mining cryptoassets,” the report said.
Mitch Klee, who writes for Bitcoin Magazine and was formerly with Compass Mining, said that “to ban PoW is to ban GDP and innovation at the expense of the American people. We already know what happens at the end of this story. Re: China.”
Ethan Vera, operations manager at mining services company Luxor Technologies, encouraged US-based miners in a tweet to learn about other regions such as Northern Europe, Latin America and Southeast Asia.
In a LinkedIn post, Lee Bratcher, founder and president of the Texas Blockchain Council, a state industry association and lobby group, also picked up on the possibility of banning the industry.
In his view, an attempt to do so with an executive order would be “on dubious legal grounds” and Congress “has trouble enacting legislation in general… [C]absolutely a ban on PoW mining, with many elected officials from both parties supporting the industry, the chances of this are pretty slim.”
SBP’s David said the office probably added that to “be intransigent, because they know any attempt to eliminate PoW will be impossible and unpopular.”
However, according to SBP’s David, die-hard bitcoin advocates are unlikely to come to any other conclusion: “Unless OSTP came out and said, ‘bitcoin is going to save the planet from climate change’ and offered total industry support, society will perceive that as an attack,” which is understandable because the industry has become so rogue, he said.
“I’m concerned that this notion that we ‘need to be on the offensive’ will make it difficult to work with environmental experts,” David said.
