Saylor and Dorsey Write to Environmental Agency to Tackle BTC Energy FUD

May 04, 2022, 9:30 AM AEST - 2 weeks ago

Persistent and well-funded ESG (environment, social and governance) criticism of Bitcoin has led to the Bitcoin Mining Council (BMC) issuing a stinging letter to the US Environmental Protection Agency (EPA):

Setting the Record Straight

Over 50 signatories, including Jack Dorsey and Michael Saylor, have endorsed a letter from the BMC responding to an April 20 letter co-signed by 20 House representatives arguing for increased regulation over Bitcoin and proof-of-work consensus mechanisms.  

The BMC, established last year, carefully proceeded to respond to several of what it termed “misconceptions”, outlined in the original letter of complaint.

The first was that “bitcoin mining facilities across the country are polluting communities and are having an outsized contribution to greenhouse gas emissions”. BMC responded by pointing out that the authors were confusing data centres and power generation facilities:

Emissions are created at the power generation source upstream from the data centres. Digital asset miners simply purchase electricity from the grid, the same as Microsoft and other data-centre operators. Data centres engaged in the industrial-scale mining of digital assets do not emit CO2 or any other pollutants, like other industrial facilities do; they are merely server farms engaged in computation.

BMC letter

BMC Survey: 58.4% of BTC Mining Sustainable

Regarding the “outsized” contribution reference, BMC noted that its recent survey found 58.4 percent of global bitcoin mining was sustainable, notably higher than the average industrial sustainable energy usage in the US, which is at 21 percent. As reported by Crypto News Australia earlier this year, BTC mining emissions have been found by others to be “inconsequential”.

Another accusation in the letter stated that “a single Bitcoin transaction could power the average US household for a month”. In response, the BMC said the claim was “patently and provably false” as Bitcoin transactions do not carry an “energy payload”:

Broadcasting a transaction requires no more energy than a tweet or a Google search.

BMC letter

It isn’t the transactions that consume energy, it’s the energy consumed by miners competing for issuance and fees, which by design are drastically falling given that 90 percent of BTC supply has already been issued.

After outlining the Lightning Network’s ability to scale BTC payments, BMC concluded that “it therefore makes no sense to associate energy consumption with individual transactions, since Bitcoin’s energy usage is not related to transactions, and Bitcoin can scale arbitrarily without increasing its transaction count or energy usage”.

PoW vs PoS: Unfair Comparison

Finally, the BMC letter went into painstaking detail as to the difference between proof-of-work versus so-called “environmentally friendly” proof-of-stake consensus mechanisms. The latter, it suggests, “should be understood as an industry term for a shareholder-governed financial consortium” and is “wholly taxonomically different, with different objectives and capabilities”. BMC concluded that it was highly misleading to compare the energy use of both:

Across a long enough timescale, facts usually triumph over ignorance. In this case, it seems inevitable despite the best efforts of some who appear to prefer repeating one refuted claim after another.

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