U.S. senators pose questions about crypto mining, blockchain tech use-cases
U.S. senators are raising serious questions about blockchain technology. A major concern is the consumption of electricity due to crypto mining, which was raised at a hearing held by the U.S. Senate Committee on Energy and Natural Resources on Tuesday.
The hearing was aimed to explain blockchain technology and its possible benefits to the energy industry. Senators on the Energy Committee largely inquired about crypto mining and how blockchain can be applied to various projects.
According to a testimony by Thomas Golden, program manager of technology innovation at Electric Power Research Institute, Bitcoin mining requires around 1-3 GW of constant electricity demand. This represents less than 0.1 percent of the global electricity generation capacity, he said.
Golden pointed out that since crypto miners resort to mining in regions where electricity is cheaper, local utilities have struggled with accommodating or banning this type of electricity load.
Mining-free model impact on electricity consumption
Claire Henly, managing director at Energy Web Foundation, highlighted the fact that the blockchain industry is working on alternatives to energy-intensive versions of the technology.
“These alternatives are not without tradeoffs, but it’s become clear to the industry that the energy intensity of Bitcoin and similar networks is a critical problem to be addressed,” she said.
Though many cryptocurrencies are looking at designing blockchains that do not require mining, Bitcoin developers have strongly resisted major changes to its design. And Bitcoin is the largest consumer of crypto mining energy.
According to Arvind Narayanan, associate professor at Princeton University, this is the main reason why adopting a mining-free model may not necessarily impact overall energy consumption in the short-to-medium term.
Blockchain use-cases for energy industry
Henly is of the belief that blockchain technology can make energy markets more efficient and accessible. She gave an example of a blockchain energy use-case – Origin, a blockchain-based tracking system for renewable energy credits.
However, she cautioned that Europe was far ahead of the U.S. in terms of blockchain expertise. “Without further research and development funding, the US is at risk of falling behind as this technology quickly develops,” she added.
Golden cautioned that the blockchain technology behind cryptocurrencies could streamline the management of other transactive processes, but “it is too soon to determine its ultimate impact”.
Though the hearing did not reach any conclusion on the matter discussed, the hearing allowed senators to pose questions, thereby helping them understand the technology better.
Image via Shutterstock
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