Senate energy hearing raises concerns over crypto-mining
The US Senate Committee on Energy and Natural Resources held a hearing on Tuesday to consider the energy efficiency of using blockchain technology and its use in applications such as cybersecurity.
One of the key questions asked was could electricity prices be expected to increase due to rising demand from such activities as cryptocurrency mining and other blockchain-based applications.
Mining power concerns
Committee chair Senator Lisa Murkowski of Alaska said growing demand at municipal level from crypto-mining farms was causing stress for some utility providers and could even damage the electric grid.
She suggested some consumers might be asking: “My family and I might not be the ones that benefit from blockchain and bitcoin and yet I’m wondering are my rates going to be expected to pay for this infrastructure.”
Some municipal utilities in the US have already considered new power usage rates for large crypto mining operations. Last month, Franklin Public Utility in Washington state suspended all new applications for mining licences.
Claire Henly, managing director of the Energy Web Foundation, said at the hearing that bitcoin’s energy use is a substantial concern: “We know that bitcoin’s energy use will prevent it from being able to scale.”
But the hearing also considered the positive potential of blockchain in the energy sector, in particular its cybersecurity applications in validating network security protocols.
Others suggested blockchain could be deployed within the grid to enable decentralised power trading rather than one company operating such a platform.
Arvind Narayanan, associate professor of computer science at Princeton University, suggested: “Other initiatives enable customers to directly trade electricity with each other in a ‘peer to peer’ fashion, for example, by buying and selling excess rooftop solar power.”