The U.S. House Committee on Energy and Commerce has announced a hearing on the crypto industry’s energy consumption. Said hearing is to be held on Thursday, Jan 20, 2022.
Committee Chairman Frank Pallone (D-NJ) and Diana DeGette (D-CO), Oversight and Investigations Chair made a joint statement on the hearing, “In just a few short years, cryptocurrency has seen a meteoric rise in popularity. It’s time to understand and address the steep energy and environmental impacts it is having on our communities and our planet.”
They also stated that the focus of the hearing would be on proof-of-work (PoW) blockchains, not unlike the ones used by Bitcoin and Ethereum, as well as how these cryptocurrencies could move on to utilize cleaner alternative methods.
“We look forward to examining the crypto mining’s growing energy footprint and how proof of work blockchains, in particular, may migrate toward cleaner alternatives and renewable energy solutions.”
The hearing is to be titled “Cleaning Up Cryptocurrency: The Energy Impacts of Blockchains,” and is to be held on 20th Jan at 10:30 am EST.
When it comes down to it, the impact on the environment regarding PoW blockchains is well-documented. These blockchains require powerhouse PCs to hold complex mathematical calculations around the clock in order to secure the network. This kind of computational activity requires a ton of energy.
Per Cambridge University, the Bitcoin network takes up approximately 120 terawatt-hours (TWh) of energy, and that’s per year. It’s a higher figure than most countries across the globe.
Furthermore, Bitcoin isn’t the only PoW-based cryptocurrency that consumes a ton of energy. A Digiconomist website states that the Ethereum network consumes around 106 TWh per year. This website tracks the unintended consequences of the technology.
An alternative method now exists, such as the Proof-of-Stake (PoS) consensus algorithms. Cryptocurrencies built on the PoS-blockchain find themselves secured as they have validators lock up their own cryptocurrency, instead of having computers perform all the energy-intensive calculations.
PoS blockchains are said to be less environmentally damaging.