The four largest US-based mining operations – Core Scientific, Marathon Digital Holdings, Riot Blockchain and Stronghold Digital Mining – received a letter from the House Committee on Energy and Commerce. The committee wants to know about their energy use and “how each company mitigates these impacts and what steps are being taken to ensure their operations do not strain the energy grid or undermine our nation’s climate goals.”
Is this a teachable moment or a sign of things to come? Are Core Scientific, Marathon, Riot and Stronghold up to the task? Could interest from the US government actually be a positive sign for the sector? Or are they stepping up measures to attack the bitcoin mining industry? Why Core Scientific, Marathon, Riot and Stronghold? Why now? Has it to do with BlackRock bitcoin mining green light? Or does it have to do with the harsh sanctions against Tornado Cash?
JUST IN – 4 US #Bitcoin mining companies including Marathon, Riot, CoreScientific and Stronghold have received a letter from the US House Committee on Energy and Commerce demanding explanations about energy use and e-waste. pic.twitter.com/IX4IHttG0b
— Dennis Porter (@Dennis_Porter_) August 19, 2022
In a press release, described the House Committee on Energy and Commerce Core Scientific, Marathon, Riot and Stronghold cases such as:
“Blockchain technology holds enormous promise to make our personal information more secure and the economy more efficient. However, the energy consumption and hardware required to support PoW-based cryptocurrencies can in some cases produce serious externalities in the form of harmful emissions and excess electronic waste.”
Where does the Chamber get this information from? The completely debunked Digiconomist, perhaps? Have they read this letter sent 14 members of Congress to the EPA? Do they know how bitcoin can use methane well and curb gas flaring in the process?
Background to the core Scientific, Marathon, Riot and Stronghold cases
Consider BlackRock’s latest twist on their bitcoin policy:
“BlackRock has been a leader in the Environmental, Social, and Governance (ESG) movement. The company and others have poured billions of capital into companies that meet their criteria. Bitcoin was considered outside of this movement due to its alleged high energy consumption.
Today’s announcement, which comes from the largest investment firm in the world, sends a completely different signal to the financial world. According to the analysis account MacroScope, BlackRock is it wave the “green ‘BTC is ok’ flag to the entire ESG-focused investment sector.”
But also consider how serious the sanctions are against Tornado Cash:
“This sanction came directly from the Office of Foreign Assets Control (OFAC), which is responsible for sanctioning countries and foreign entities that the US government has deemed enemies of the state or major criminals. Just as it is illegal to trade with a country or an organization sanctioned by OFAC, it is illegal to transact with Tornado Cash or any funds associated with it.”
The question here is: Does the Core Scientific, Marathon, Riot and Stronghold case relate to the first story or to the second? Is the US about to declare the highly profitable business of bitcoin mining ESG friendly? Or are they tightening the screws?
BTC price chart for 08/21/2022 on Bitfinex | Source: BTC/USD on TradingView.com
What does the US government want to know?
The second quote in the press release does not sound good for bitcoin mining in the US. The House Committee on Energy and Commerce told Core Scientific, Marathon, Riot and Stronghold:
“Given the existential threat posed by the climate crisis, we are deeply concerned about efforts like this that increase the demand for fossil fuels, with the potential to expose our energy grid to new stresses. While blockchain technology is emerging as a potentially important tool to combat climate change, increasing demand on the grid and burning more fossil fuels to power PoW crypto mining facilities only serves to undermine the potential climate benefits of blockchain technology and hold us back from achieving our climate pollution reduction goals .”
However, keep in mind, the results of the Bitcoin Mining Council. “According to the BMC survey, participants use electricity with 66.8% of the sustainable power mix. This represents an increase over Q1, 2022, data and registers an estimate of 59.5% sustainable electricity mix across the entire Bitcoin network.” If the government does a thorough investigation and finds this to be true, an entire industry could get that stamp which it has been waiting for.
However, the opposite is also true. It doesn’t matter how green the bitcoin network gets, this could go either way.
The exact questions that Core Scientific, Marathon, Riot and Stronghold must answer
The US government wants to know:
- “How much energy did each of the company’s crypto mining facilities use in 2021?”
- “What energy sources are used by companies serving each of the facilities, including the energy mix for each?”
- “What is the percentage of energy used that is compensated with credits for renewable energy?”
- “In the past 12 months, how many days have companies restricted cryptomining to support network stability?”
- “In 2021, what was the average cost per megawatt hour and profit per megawatt hour at each of the company’s crypto mining facilities?”
Do you really think that Core Scientific, Marathon, Riot and Stronghold are not ready for those questions? They have been working towards these goals from the very beginning. The House Committee on Energy and Commerce will be pleasantly surprised.
Featured Image: House Committee On Energy and Commerce header | Charts by TradingView
