BMC numbers are more geared towards CoinShares than US legislators
In January, proof-of-work mining and Bitcoin came under intense government scrutiny.
The Energy and Trade Committee’s Oversight and Investigations Subcommittee held a hearing entitled “Cleaning Up Cryptocurrency: The Energy Impacts of Blockchains.”
The briefing memorandum provided some PoW mining statistics to stimulate debate during the hearing. These contained
- The estimated annual energy consumption of the Bitcoin network increased from 77.78 terawatt hours (TWh) on January 02, 2021 to 198 TWh on November 26, 2021.
- During the same period, the annual energy consumption of the Ethereum network increased from 14.81 TWh to more than 92 TWh.
- A single ETH transaction added more than 90 pounds of CO2 to the atmosphere, while a single BTC transaction added more than 1,000 pounds.
- Global CO2 emissions from ETH and BTC mining in 2021 are equivalent to the tailpipe emissions of more than 15.5 million gasoline-powered cars on the road every year.
In addition to the numbers above, there were also several other influencing factors that the legislature had to consider,
- As part of the goal to be carbon neutral by 2060, China banned bitcoin in June 2021.
- According to the Cambridge Center for Alternative Finance, the United States is the largest bitcoin mining nation.
- In April 2021, President Joe Biden set targets to reduce greenhouse gas emissions. This included a 50-52% reduction in net aggregate greenhouse gas emissions from 2005 levels by 2030.
- The US has a net-zero emissions target by 2050.
Regarding the US president’s emissions targets, members of the Democratic Party stood “firmly against crypto” at the subcommittee hearing in January.
Since the January hearing, the crypto community has responded with their crypto mining statistics.
CoinShares offers a different take on PoW mining
In February, we reported on new mining statistics that challenged the figures from the briefing memorandum and figures used by other anti-crypto lawmakers.
Included key stats from a CoinShares paper titled “The Bitcoin Mining Network, Energy, and Carbon Impact,”
- The Bitcoin mining network emitted 36 Mt CO2 in 2020 and 39 Mt CO2 in 2021, accounting for less than 0.08% of a total of 49,360 Mt CO2 emissions worldwide.
CoinShares provided an industry breakdown of carbon emissions for comparison. These contained
- Emission estimates for minting and printing fiat currency are around 8 Mt CO2 emissions per year.
- The gold industry generates between 100 and 145 Mt CO2 emissions annually (estimated).
- Global emissions from the banking system amount to approximately 130 Mt of CO2 emissions each year.
Given these differing numbers, the Environmental Protection Agency (EPA) can provide more information to lawmakers to make a more informed judgment about PoW mining.
It’s unlikely that this week’s BMC release will end debate and scrutiny. The BMC represents 44 bitcoin mining companies that claim to generate 50% of the global bitcoin hashrate. The 44 are probably the “best in class” miners.
Last month, the European Parliament averted a bitcoin crisis by voting against a proposed ban on proof-of-work (PoW) cryptos. A PoW mining ban would ban Bitcoin, Ethereum (ETH) and other PoW cryptos.
On Wednesday, U.S. lawmakers’ probe into crypto mining returned, with lawmakers writing to the EPA to investigate possible violations of environmental laws by crypto mining.
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