Dorsey, Saylor and Fidelity Write to EPA to Defend Bitcoin Mining

These machines, known as mining rigs, work around the clock to find new units of cryptocurrency.

Benjamin Hall | CNBC

Some of the biggest names in bitcoin — including Jack Dorsey, Tom Lee and Michael Saylor — have come together to refute allegations made by House Democrats urging the Environmental Protection Agency to investigate the environmental effects of cryptocurrency mining.

Bitcoin operates on a proof-of-work (PoW) mining model, which means miners around the world run high-powered computers to simultaneously create new bitcoins and validate transactions. Proof-of-work mining, which requires fancy equipment and a lot of electricity, has pretty much become synonymous with bitcoin, although ethereum – at least for a few more months – still uses this method to secure its network.

Representative Jared Huffman (D-Calif.), along with nearly two dozen House lawmakers, wrote to the EPA last week urging the regulator to ensure mining companies comply with the Clean Air and Water Act. Clean, citing “serious concerns regarding reports that cryptocurrency facilities across the country are polluting communities and are making a massive contribution to greenhouse gas emissions.”

In a rebuttal letter sent to EPA chief Michael Regan on Monday morning, a mix of bitcoin miners and industry experts — as well as companies like Benchmark Capital, Fidelity Investments and Fortress Investment Group — argue that Democrats of the Chamber were very wrong in their decisions. messages about the fundamentals of proof-of-work mining.

On the one hand, the letter questions lawmakers who confuse data centers with power generation facilities.

The rebuttal letter says that data centers that contain “miners” are no different from data centers owned and operated by Amazon, Apple, Google, Meta and Microsoft. According to the letter, each is just a building in which electricity powers IT equipment to run computing workloads.

“Regulating what data centers allow their computers to do would be a major change in policy in the United States,” the letter reads.

“They are confusing the public,” said Darin Feinstein, co-founder of cryptocurrency mining operator Core Scientific — and a lead author of the letter. “Pollution comes from the power generation source and all data centers buy electricity off-site, upstream.”

Feinstein said that if the EPA wants to regulate power generation, channels already exist to regulate power generation facilities at the federal, state and local levels.

“It would be very unusual for the EPA to regulate the type of computing that is taking place inside a data center. This is clearly outside its remit,” Nic Carter of Castle Island Venture, who helped write the rebuttal, told CNBC.

“It makes no sense to ask the EPA to worry about what kind of computing is being done,” Carter said.

Although the EPA regulates power plants, very few PoW mining companies actually own the power production, according to the rebuttal.

“The letter makes it look like there are a lot of these vertically integrated miners like Stronghold and Greenidge… the bitcoin network.

Huffman and his House colleagues also have problems with specialized computing hardware, which they claim creates “major e-waste challenges” as millions of devices quickly become obsolete, leading to massive amounts of e-waste.

The letter cites estimates that bitcoin mining alone produces 30,700 tons of e-waste annually. “Industry needs to be held accountable for this waste and discouraged from creating it,” the letter argues.

The note to the EPA this morning refutes the e-waste claim, saying lawmakers cited a widely criticized research study that makes bold assumptions about the depreciation schedule for mining rigs. The letter says the assumption of a 1.3-year period for depreciation is “extremely short” and lawmakers infer that the entire rig fleet is periodically scrapped.

It’s unclear whether the EPA will enter the broader proof-of-work mining debate. The agency did not immediately respond to CNBC’s request for comment.

.

Leave a Comment

%d bloggers like this: