Crypto miners are making more money now than ever before given the increase in the value of cryptocurrencies, says Frank Pallone, the House Energy and Commerce Committee Chairman. He said there are concerns that as long as the dollar value of proof-of-work (PoW) cryptocurrency mining rewards exceed the costs of deploying, powering, and cooling mining facilities, energy consumption and the environmental impact will grow further.
The Congressional hearing was told on January 20 that energy required to validate just one ethereum transaction could power a US household for more than a week. And the energy required by one bitcoin transaction could power a house for more than 70 days. Pallone highlighted that a single ethereum transaction added more than 90 pounds of carbon dioxide to the atmosphere, while a single bitcoin transaction emitted more than 1,000 pounds of the same.
The committee, in a memorandum, stated that ethereum and bitcoin mining operations are both responsible for emitting more than 78 million tons of carbon dioxide into the atmosphere. This is equivalent to the annual tailpipe emissions or more than 15.5 million cars.
Pallone believes the energy consumption can be reduced. He said it is possible with Proof-of-Stake (PoS), which is coming in the Ethereum 2.0 upgrade. Experts say it uses 99.99% less energy than a PoW blockchain. Cryptocurrency validators in the PoS share the task of validating transactions.
John Belizaire, CEO of Soluna Computing, said that the energy used to perform the computation provides irrefutable proof that a participant earned the right to process the new block. It encourages participants to protect the network. Brian Brooks, CEO of Bitfury Group, added that the requirement of energy expenditure in PoW blockchains enhances security. It’s expensive and energy-intensive because it takes over 51% of the network’s computing power. Brooks highlighted this as the main factor as to why bitcoin blockchain has never been hacked or a single BTC counterfeited.