US Senate has Bitcoin Mining Cost Concerns, Inquires about Federal Blockchain Use
US Senate Remains Weary of Cryptocurrency Mining, But Seems Positive About Blockchain Technology
On Wednesday, the United States Senate Committee on Energy and Natural Resources came together to discuss yet another issue with cryptocurrency. Rather than debating its worth or classification, the discussion seemed to surround the amounting costs of cryptocurrency mining within the country. The topic of blockchain technology also had a starring role in the meeting.
Most meetings regarding cryptocurrency have been a place of offering new information, considering that a substantial number of representatives have little or no experience with crypto. The speakers during this meeting came from a wide range of view, offering both public and private sector details. Thought previous meeting have been unfriendly, at its best, this meeting took a slightly less volatile turn.
The Senators on the Energy Committee primarily were interested in the concept of the blockchain and wanted to investigate different use cases that could help the government. There were multiple speakers providing their official testimony on the subject, including:
- Robert Kahn of the Corporation for National Research Initiatives
- Paul Skare of the Pacific Northwest National Laboratory
- Thomas Golden of the Electric Power Research Institute
- Claire Henly of the Energy Web Foundation
- Arvind Narayanan of Princeton University
Based on the remarks of Senator Lisa Murkowski of Alaska, the point of the hearing is for them to:
“examine any cyber security advantages that blockchain and similar technologies might offer over other ways of securing our energy infrastructure.”
The biggest risk discussed appeared to be in reference to the energy that mining cryptocurrency spends. Any network with proof-of-work (PoW) uses an impressive amount of energy, including additional energy to prove the actions they took. Golden took over these concerns, saying that the range on use can vary between 1 to 5 gigawatts, further clarifying, “this is less than 0.1 percent of the global power usage.”
When Murkowski replied, she said that the use of this energy within the United States can put more pressure on utility providers, threatening the security and function of the electric grid. For that reason, she inquired:
“Can we anticipate the consumer rates and the concern that some might have that, ‘my family and I might not be the ones that benefit from blockchain and bitcoin and yet I'm wondering are my rates going to be expected to pay for this infrastructure?”
Senator Steve Daines chimed in as well, wondering how communities can even prepare for this influx of energy. Golden suggested that the community and the power utilities collaborate, which would help with the infrastructure concerns.
Henly admitted that the amount of energy used for Bitcoin is “a substantial concern,” and proposed another solution. She mentioned the idea of finding an alternative to the proof-of-work protocol, which would eliminate the need for the extra power. She pointed out that proof-of-stake (PoS) and proof-of-authority (PoA) protocols were a much better option for energy expenditure and would help to scale the blockchain without adding to the supply of energy that mining already uses.
There were many times that the discussion moved from the potential concerns, and instead shed light on the way that blockchain technology could be integrated. Shipment tracking, security protocols, and other technological advancement are all areas that blockchain has been used for in other companies and industries, so why not the United States government? Senator Maria Cantwell’s opening statement specifically focused on how secure blockchain truly is.
Other senators had their own questions for this concept as well, showing their interest in learning about the other elements of blockchain, apart from cryptocurrency. Transaction privacy and maintaining flexibility with law enforcement was a concern for Senator Catherine Cortez Masto, while Senator Bill Cassidy wanted to ask about specific uses that could adapt to the government. Specifically, he wanted to know if blockchain could track shipments between nations, which is possible. However, it would require cooperation on both sides of the deal.
Just like every other hearing, no concrete solutions or decisions were established. However, by opening the door for lawmakers to learn more from the individuals who run these types of businesses, the door is open for further explanations for an eventual resolution.