Disclaimer: Information found on CryptoreNews is those of writers quoted. It does not represent the opinions of CryptoreNews on whether to sell, buy or hold any investments. You are advised to conduct your own research before making any investment decisions. Use provided information at your own risk.
CryptoreNews covers fintech, blockchain and Bitcoin bringing you the latest crypto news and analyses on the future of money.
Crypto mining may assist with energy fluctuations, Paradigm addresses regulatory challenges.
As U.S. legislators contemplate restrictions on data and mining facilities due to energy consumption, the industry aims to clarify that their concerns about crypto are misplaced.
Bitcoin mining machines (Shutterstock, modified by CoinDesk)
Related Posts
What to know:
- Crypto investment company Paradigm has addressed recent legislative actions aimed at bitcoin mining, asserting in a report that the concerns are misplaced.
- According to Paradigm, which has invested in miner Genesis Digital Assets, bitcoin miners require inexpensive electricity and can leverage it during off-peak hours from low-cost, renewable sources.
Legislators across North America are expressing concerns about the energy consumption of crypto, artificial intelligence, and other data centers and its potential impact on the affordability for regular consumers. However, Paradigm contends that bitcoin mining operations should be excluded from these discussions.
STORY CONTINUES BELOWDon’t miss another story.Subscribe to the State of Crypto Newsletter today. See all newslettersSign me up
Bitcoin mining indeed consumes a significant amount of electricity. Nonetheless, the business model is viable primarily when energy is particularly affordable—such as when sourced from off-peak renewable energy—and can be returned to the grid during peak demand, as stated in a report by Paradigm, which includes Genesis Digital Assets in its investment portfolio.
The report, reviewed by CoinDesk, challenges prevalent assertions regarding the energy usage and waste associated with bitcoin mining, indicating that the sector utilizes approximately 0.23% of global energy and contributes about 0.08% of carbon emissions. Additionally, miners must operate within a “break even price” per megawatt hour of electricity to achieve profitability.
“This indicates that Bitcoin mining inherently balances the overall energy consumption of the average community, providing stability to the grid rather than creating strain,” according to the report authored by Justin Slaughter, vice president for regulatory affairs at Paradigm, and Veronica Irwin. “In essence, it contributes to a balanced energy ecosystem.”
Federal and state policy initiatives are accumulating that aim to restrict data centers and digital mining activities, which may fall under the “data center” classification in U.S. law. Recently, U.S. Senators Richard Blumenthal, a Democrat from Connecticut, and Josh Hawley, a Republican from Missouri, proposed legislation to prevent data centers from increasing electricity costs for consumers, although the bill does not specifically reference bitcoin or cryptocurrency. Similarly, New York state legislators have been pursuing a moratorium on data centers.
“Artificial intelligence (AI) and cryptomining are driving an increased demand for energy due to large, energy-intensive data centers,” several Democratic U.S. senators noted in a November letter to the head of the Federal Energy Regulatory Commission, requesting “immediate action” to safeguard consumers.
In Canada, British Columbia announced in October its intention to suspend new crypto mining activities from its energy grid.
The Paradigm report argued that “bitcoin miners who utilize energy that would otherwise be wasted or those who engage in state-led initiatives to enhance grid control should be incentivized for their positive actions.”
