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Bitcoiners Protest Democrats’ Misleading Letter to EPA

  • The bitcoin industry has railed against a letter signed by nearly two dozen members of Congress urging the EPA to tightly regulate crypto mining
  • Crypto advocates cite flaws in detractors’ data and a misunderstanding of the industry’s future energy needs

Bitcoin industry advocates responded this week to a letter sent to the Environmental Protection Agency by Rep. Jared Huffman (D-CA) and signed by a total of 23 Democratic congressmen.

The extensive rebuttal by the Bitcoin Mining Council, a group representing Bitcon miners, is co-signed by nearly 50 industry figures, including Castle Island Ventures’ Nic Carter – who contributed much of the essay – and Block and Jack Dorsey Galaxy Digital’s Mike Novogratz.

“I wanted to write a response, there were a number of key stakeholders who felt a response was warranted based on how misleading the Huffman letter was and how critical it might be,” Carter told Blockworks, noting that the EPA it could make it more difficult for crypto mining companies to acquire their own power generation sources.

“If 23 congressmen signed this thing off, it could get messy.”

Carter detailed a number of inaccuracies in the original Huffman letter. For one, he noted that Huffman emphasized the EPAs refusal a Greenidge application to keep his so-called “coal ash ponds,” large debris, open ditches it used to dispose of harmful carbon by-products that are not biodegradable.

But Greenidge is now a pure gas operation mining Bitcoin. The company uses these ponds to continue reducing waste associated with its past life as a coal-fired power plant. Therefore, celebrating the EPA’s move against Greenidge’s coal ash ponds is not at all relevant to crypto mining, Carter said.

Another sticking point was Huffman’s claim that “a single bitcoin transaction could power the average US household for a month.” This calculation relies on taking the average number of transactions and simply dividing it by the network’s estimated energy consumption.

The Bitcoin Mining Council’s response called the “per transaction” energy cost analysis a “deeply flawed way to argue about bitcoin, since forecasting future energy growth does not depend on the number of transactions but on the value of the bitcoin emission (the one function of price). and supply growth), along with the fees users are willing to pay for transactions.”

At the core of Carter’s response was to separate data centers (read: crypto mining farms) from their power sources. For Carter, crypto miners are just another variant of data centers operated by Microsoft and Amazon; large warehouses full of servers to support our modern internet infrastructure.

“It’s not really EPA’s mandate to say that what you’re doing with this data center is harmful to the environment, because it’s not the data center activity that’s causing harm, it’s the generation of electricity, and that’s already regulated,” he said Carter.

He noted that some vertically integrated crypto mining operations — those that control the data center and its power source — are already being sanctioned by the EPA and some state regulators. According to the Council’s response to the EPA, only 2% of Bitcoin’s hashrate comes from vertically integrated crypto miners.

“It’s a myth to say that the EPA is unaware of these things. They are very aware of them and are supported in some cases,” Carter added. However, he noted that the noise pollution caused by Bitcoin miners is unnecessary and that he would actively discourage industry participants from locating in residential areas.

Bitcoin runs on a global secondary market for ASICs

Regarding PoW’s alleged e-waste problem, Carter questioned whether environmentalists were interested in the truth or whether they were simply using the concept as a bludgeon to attack Bitcoin.

Experienced mining consultant and Proof of work.Energy Founder Alejandro de la Torre agreed. After spending the past five years supporting and building mining operations around the world, de la Torre expressed disbelief that any industry player would just throw away their ASICs after less than two years of use.

He explained that in his experience, once a machine has a fault — say, a circuit board is on fire or a part is faulty — miners almost always fix it, rather than paying for a brand new rig. In fact, the entire crypto mining industry relies heavily on a buoyant secondary market for used ASICs.

De la Torre described a global market for ASICs that allowed less capitalized miners to acquire used rigs from more established crypto powerhouses. Wealthier crypto mining companies know that as more efficient technologies are developed, they can eventually sell their top-of-the-line mining rigs.

This creates a symbiotic relationship between small and large operations that benefits both sides: smaller ones can buy cheaper hardware from larger ones to offset the cost of state-of-the-art machines. Every mining operation in the ecosystem takes advantage of this secondary market, de La Torre pointed out.

“Right now you have miners everywhere who pay almost nothing for their electricity, sometimes even zero,” de la Torre told Blockworks. “Those in Venezuela or off-grid miners who own their own hydroelectric plants and those who use flared gas.

“They don’t mind buying a machine that’s four years old because they have free electricity – so they run their machines until they die.”

Once ASICs finally fail – often after multiple repairs and numerous owners – ASICs are reused. Much of the circuitry and aluminum is sold as scrap and otherwise recycled. On average, de la Torre estimated the average lifespan of an ASIC to be closer to six years, far longer than the 1.29 years often cited by environmentalists.

“That’s why the economics of bitcoin mining work so well,” de la Torre said. “You buy a machine for $10,000, for example. You run it for two years, then you sell it for $6,000. You only lost $4,000 on the machine while generating tons of bitcoin with it.”

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The Post Bitcoiners Protest Democrats ‘Irreleading’ Letter Sent to EPA is not financial advice.

Source: Crypto News Austria

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