The
U.S.
Department
of
Energy
(DOE)
is
taking
a
closer
look
at
bitcoin
{BTC}
mining.
Is
this
cause
for
alarm?
More
specifically,
the
Energy
Information
Administration
(EIA),
a
statistics
agency
under
the
DOE,
will
survey
the
electricity
use
of
selected
U.S.-based
miners
over
the
coming
six
months
starting
next
week,
after
putting
out
an
“emergency
collection
of
data
request.”
This
is
an
excerpt
from
The
Node
newsletter,
a
daily
roundup
of
the
most
pivotal
crypto
news
on
CoinDesk
and
beyond.
You
can
subscribe
to
get
the
full
newsletter
here.
Given
the
phrasing
of
an
“emergency”
order
and
the
current
administration’s
crypto-critical
stance,
many
are
worrying
that
the
information
collected
will
be
used
to
inform
potentially
harmful
policies
to
the
mining
industry.
In
its
public
filing,
the
EIA
cites
the
possibility
of
“public
harm”
from
crypto
mining
for
collecting
the
data.
“EIA
is
policy
neutral
agency
that
does
not
create
policy,
implement
policy,
enforce
policy
or
comment
on
policy.
EIA
spokesperson
Morgan
Butterfield
told
CoinDesk
in
emailed
responses.
“Results
from
the
data
we
collect
will
help
inform
our
path
forward
regarding
a
regular
three-year
clearance
during
the
next
six
months.”
But
being
policy-neutral
doesn’t
necessarily
mean
the
survey
won’t
influence
policy.
There’s
reason
enough
to
believe
that
simply
by
running
this
survey
the
EIA
is
asking
questions
about
the
larger
purpose
of
Bitcoin
and
whether
it
benefits
society,
and
already
has
an
answer
in
mind.
For
instance,
the
justification
for
the
emergency
order,
granted
by
the
Office
of
Management
and
Budget,
was
the
recent
crypto
price
rally,
which
saw
bitcoin
climb
over
50%
in
a
matter
of
months,
which
the
EIA
said
would
“incentivize
more
cryptomining
activity,
which
in
turn
increases
electricity
consumption.”
“Given
the
emerging
and
rapidly
changing
nature
of
this
issue
and
because
we
cannot
quantitatively
assess
the
likelihood
of
public
harm,
EIA
feels
a
sense
of
urgency
to
generate
credible
data
that
would
provide
insight
into
this
unfolding
issue,”
it
said.
Butterfield
said
82
firms,
operating
approximately
150
facilities,
were
selected
to
represent
the
”universe
of
cryptocurrency
companies”
across
the
country.
The
agency
pointed
to
a
cold
snap
that
hit
Plattsburg
in
2018,
to
justify
the
risks
crypto
poses
to
the
public.
“The
combined
effects
of
increased
cryptomining
and
stressed
electricity
systems
create
heightened
uncertainty
in
electric
power
markets,
which
could
result
in
demand
peaks
that
affect
system
operations
and
consumer
prices,”
it
wrote.
Since
then,
New
York
State
has
passed
a
two-year
moratorium
on
opening
new
crypto
mining
facilities
unless
they
are
powered
entirely
by
renewable
energy.
Texas,
which
was
a
major
benefactor
after
China
passed
a
nation-wide
crypto
mining
ban,
has
also
sought
to
slow
down
the
mining
industry.
Crypto
miners
in
Texas
work
directly
with
the
state-owned
grid
operator
and
get
paid
to
power
down
during
periods
of
peak
demand
or
moments
of
network
stress.
To
be
fair,
a
public
version
of
the
survey
shows
the
EIA
is
asking
fairly
routine
questions
of
mining
firms,
including
how
many
and
what
type
of
chips
they’re
running,
their
electricity
consumption
at
the
facility
and
how
much
goes
directly
towards
mining.
“We
will
specifically
focus
on
how
the
energy
demand
for
cryptocurrency
mining
is
evolving,
identify
geographic
areas
of
high
growth,
and
quantify
the
sources
of
electricity
used
to
meet
cryptocurrency
mining
demand,”
the
agency
said
in
a
statement.
The
reports
are
due
on
the
last
Friday
of
the
month
until
the
end
of
July,
after
which
it
may
be
renewed.
Further,
there’s
an
argument
to
be
made
that
having
high-level
statistics
like
this
will
benefit
the
country
and
the
industry,
given
that
it’s
more
detailed
information,
straight
from
the
horse’s
mouth.
At
the
moment,
the
best
data
we
have
for
the
mining
industry’s
footprint
come
from
the
Cambridge
Bitcoin
Electricity
Consumption
Index,
which
gives
hypothetical
lower-
and
upper-bound
estimates
of
the
Bitcoin
network’s
daily
energy
consumption,
essentially
by
extrapolating
out
from
the
current
hashrate.
But
you
have
to
ask,
why
run
the
survey
now?
Why
was
the
most
recent
run-up
in
bitcoin
prices
a
cause
for
an
emergency
but
not
others?
It’s
worth
noting
that
the
Biden
administration
has
prioritized
reducing
the
country’s
carbon
footprint.
And
that
crypto-critical
Senator
Elizabeth
Warren
(D-Mass.)
asked
federal
regulators
to
have
crypto
miners
disclose
their
emissions
and
energy
use.
Bitcoin
mining
will
likely
become
a
popular
topic
of
debate
in
the
media
in
the
run-up
to
halvening
event,
the
programmatic
reduction
in
the
“bitcoin
subsidy”
paid
to
miners
that
happens
every
four
years.
It’s
not
yet
clear
how
the
halvening
will
impact
the
mining
sector
beyond
making
less-efficient
mining
equipment
unusable
in
the
short-term.
Some
are
expecting
the
crypto
carbon
footprint
to
grow
in
the
coming
years,
while
others
see
it
shrinking.
Moreover,
in
recent
months,
there
has
been
something
of
a
public
reckoning
on
Bitcoin’s
environmental
cost,
particularly
after
the
second-largest
network,
Ethereum
reduced
its
energy
consumption
by
99%
through
a
single
upgrade.
While
some
organizations
like
Greenpeace
are
pushing
for
Bitcoin
to
abandon
energy-intensive
mining,
some
are
starting
to
see
the
sector
as
a
boon
to
environmentalism.
Read
more:
How
Does
Bitcoin
Mining
Work?
–
CoinDesk
For
instance,
Cambridge
recently
revised
down
its
estimates
for
Bitcoin’s
annual
energy
use,
and
institutions
including
MIT
and
KPMG
have
put
out
reports
arguing
the
network
could
help
“balance”
electricity
grids,
subsidize
renewable
energy
development
and
be
useful
in
greening
the
economy.
Mining
is
an
energy-intensive
process
—
the
cryptographic
algorithm
Bitcoin
runs,
proof-of-work
(POW),
was
designed
by
computer
scientists
to
disincentivize
spam,
Sybil
and
denial-of-service
(DoS)
attacks
on
networks
by
adding
costs
to
interacting
with
a
server,
typically
in
the
form
of
computer
processing
time
put
towards
solving
a
mathematical
puzzle.
Some
observers
opposed
to
the
mining
process,
often
describe
bitcoin
mining
as
“wasted”
energy,
but
it’s
not
—
the
energy
is
purposefully
spent
as
a
sort
of
token
or
a
form
of
proof.
The
problems
bitcoin
miners
compete
to
“solve”
don’t
mean
anything
in
that
they
don’t
add
to
the
body
of
human
knowledge
or
contribute
to
something
productive
like
Folding@home,
but
they
do
have
value
–
securing
the
network.
And
that’s
the
tricky
part:
valuing
Bitcoin.
What
is
bitcoin
worth?
The
standard
response
is
to
look
at
how
the
market
values
it,
which
at
time
of
writing
is
around
$42,000.
But
most
of
the
real
debates
around
Bitcoin’s
intense
energy
footprint
have
little
to
do
with
bitcoin’s
price;
rather
they
center
around
Bitcoin’s
costs
and
benefits.
I
wish
I
could
say
the
EIA’s
survey
would
help
us
better
understa
those
costs
and
benefits.
However,
the
survey
writers
seem
to
have
already
answered
their
own
question
about
whether
Bitcoin
poses
risks
to
the
general
public
and
are
looking
for
data
to
support
that
conclusion.
