The Whitehouse and the sitting President have recently made a follow-up comment on the March executive order that was signed. Basically it was go green or go home. But is that really all there is to it?

What is the underlying issue?

In the recently published Crypto asset and climate report. They highlight the real issue, and that is electricity consumption. And they show some estimates as to the power usage for the different crypto assets. As shown below.

Source: 09-2022-Crypto-Assets-and-Climate-Report.pdf

As it is pretty clear that Bitcoin mining is consuming a lot of power. And so does Ethereum mining. But that has at best been an extremely badly kept secret. But it also appears that The US government was completely fine with this fact until China banned Crypto in 2020. That was when the influx of mining centers started in the US. It went from 3.5% of the global Bitcoin hashpower. To now 38%, that is a 10x for all you crypto folks. 

And suddenly Crypto where on every politician's lips it seemed. Everyone talking about they need to go green this, or banning that. New York even went one step further and actually banned new mining centers. Personally, I feel that is more akin to taking aspirin because you're feeling unwell, instead of figuring out the real problem. Hoping the problem has gone away when you wake up again.

Should these measures prove ineffective at reducing impacts, the Administration should explore executive actions, and Congress might consider legislation, to limit or eliminate the use of high energy intensity consensus mechanisms for crypto-asset mining

Only crypto mining is not going anywhere. So the aspirin has not really solved anything. The same issues are still there after you have woken up.

The underlying issue appears to be that a new type of business has shown up in the US in a very short amount of time. And it is consuming a lot of electricity. But is that really an issue?

Well, not really. If we take a look at the US power production we can start to get a much clearer picture of the real issue. In 2021 a total of 60.8% of all US electricity was produced by fossil fuels. While renewable made up only 20.1%, and nuclear basically made up the rest.  And now we can start to get a better picture of the issue.

If we have an emerging industry that is very power hungry. It will consume more power, and then on average, 60% of that power will come from dirty energy sources. And yes I am aware that it is just a guesstimate and not a perfect representation of the real world.

And with the climate crisis, and Biden's climate goals. This obviously does not mesh that well. Especially as the crypto mining industry does not employ a ton of people. So there is no real job creation to speak of that a politician could argue as a positive to offset the bad here.

And that I would argue is the real underlying issue. It has nothing to do with crypto mining, the same issue would be there if the emerging industry were to be blogging or Instagramming instead.

The solution

What then is the solution? In the report, they say that the problem is that crypto mining is producing greenhouse gases.

Crypto-asset mining produces GHG emissions and exacerbates climate change primarily by burning coal, natural gas, or other fossil fuels to generate electricity in 1) an onsite dedicated power plant, 2) purchasing electricity from the power grid, and/or 3) producing and disposing of computers and mining infrastructure, and production of power plant fuels and infrastructure.

And when I read that I get the feeling that they are trying to blame the crypto miners for the lack of renewable energy production. And is that fair? What other industry is being blamed for not producing green energy, just because they use energy?

In 2021 the US industry consumed a total of 33% of the power produced. And the chemical industry was by far the largest consumer there, consuming a massive 38%. Do this mean that the chemical industry is also being targeted and blamed for producing greenhouse gasses, and in a sense not providing their own green energy sources? If so, I have to admit I have missed any news to that effect. 

I would argue that the real issue is the fact that over 60% of the energy produced in the US stems from fossil fuels. And until the US as a country addresses that, blaming crypto mining, pointing fingers at them as the culprit. I say is very much like taking aspirin and wishing the problem would just go away.

Not to mention the sorely needed investment into power infrastructure that will be needed with the switch to more and more electric vehicles and such.

They can ban crypto mining all they like, but it will not solve the issue at hand. And that is the US needs to get rid of fossil fuel power generation and switch to a cleaner energy source. If that is more renewable or more nuclear power, I don't really care. And I would argue it does not really matter as long as the fossil fuel goes away. And until it does this problem will still be here, rearing its ugly head. Probably an amalgamation of all the dinosaur's skulls and bones.

The link to the report and US energy consumption is down below. Both quotes are taken from the report.

What are your thoughts on this, do you agree with me that this is actually not a crypto problem but a US problem? And crypto just made it more visible. Or is crypto mining actually the bad guy here, and I have just gotten the actual problem wrong? Please share your thoughts and comments down below.

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