This is an op-ed by Byron Donalds, US Representative for Florida’s 19th congressional district, and Brian Boring, Founder and CEO of the Chamber of Digital Commerce.
There are many reasons companies move to Florida, welcoming regulatory and tax environments and a skilled and ready workforce among them. And these are certainly some of the reasons why so many companies are in the digital asset ecosystem – incl Blockchain.comAnd okcoinAnd capital without borders And Block Tower Capital – They moved from traditional tech hotspots like California, New York, and the Pacific Northwest, for the friendlier sunshine and spur of Florida.
But there’s another reason digital asset companies are looking to Florida: the Sunshine State’s reliable power grids and its growing leadership in sustainable energy, from solar to biomass electricity to nuclear. This is because one of the building blocks of some of the most popular forms of digital assets, especially bitcoin, is proof-of-work mining, which can be an energy-intensive process, and Florida can fuel the innovation that bitcoin requires.
Proof of work was introduced for the first time in the early 1990s as a way to reduce email spam. The idea was to require computers to perform a small amount of work before sending an email to validate the message and deter spam. This would be minimal work for someone sending out one-time emails, but it takes a lot of power and computing resources for users who send bulk emails. The idea is that if there is a significant cost associated with sending millions of emails, it will deter spammers.
Proof-of-work is a necessary part of adding new blocks to the Bitcoin blockchain and the energy consumption required in Bitcoin mining data centers to validate the blocks is critical to ensuring the security of the blockchain. It also ensures that block production remains decentralized. There is no inherent advantage for those who might have started mining bitcoin earlier, eg Difficulty adjustment It ensures that bitcoin miners that started 10 years ago are still competing on equal terms with a new miner joining today.
Is Bitcoin mining harmful to the environment?
It is estimated that bitcoin mining It uses 140 terawatt-hours of energy per year And consumes About 0.22% of global energy. There are some, particularly within the executive branch, who advocate broad restrictions on mining, if not outright bans, Which indicates that heavy use of energy is harmful to the environment. This is shortsighted and wrong. Wiping out all bitcoin mining isn’t going to make a huge dent in carbon emissions, and may actually slow progress in shifting this country to more renewable energy.
Simply put, bitcoin mining can be an asset for energy development and modernization of our energy infrastructure. At the beginning of 2021More than 50% of the computing power of the Bitcoin network, known as its hash rate, is located in China and 13% in the United States. By July 2021, China banned Bitcoin mining and the United States quota of network hash rate grew to 35%. Today, bitcoin mining in the United States continues to grow, mostly in Countries with favorable environments for regulation and excess renewable energy. in 2021Globally, bitcoin mining efficiency improved by 53%, and the percentage of the industry supported primarily by sustainable energy improved from 37% to 59%.
How is Bitcoin mining and energy resources updated?
The transition to greener energy sources requires significant investment in new energy technology. Proof-of-work miners serve as a trusted customer base providing steady demand and revenue for utilities to build clean energy infrastructure. An added advantage: They can reduce energy to redeploy critical energy use elsewhere, almost instantly, something other high-demand industries simply can’t do.
For example, on occasions when customer demand is high, bitcoin miners can work cooperatively with utilities to reduce their demand. The power PoW miners use flows into the network, giving retail consumers additional capacity in just minutes without any negative effects. No other industry using similar levels of power—including other data centers, cloud service providers, and manufacturing facilities—has the capacity to do so.
An example of a state embracing these opportunities is Texas, where the electrical grid is operated by the Electrical Reliability Board of Texas, or ERCOT.
“Bitcoin miners have provided an invaluable additional tool for ERCOT operators during conditions of limited supply: a flexible payload that can pause until needed electricity flows to our most vulnerable customers.” Brad Jones saidformer CEO of ERCOT Corporation.
It is also important to note that although bitcoin mining has increased throughput over the past few years, the Bitcoin Mining Council has estimated that a sustainable electricity mix in the global mining industry is 58.5% and growing, making it one of the most sustainable industries in the world. This sustainability impact will continue to grow over time as bitcoin miners form partnerships with energy providers, utilities, communities and other groups to develop new energy capabilities.
Florida is at the forefront of the energy revolution. The solar energy industry in our state is now in the top five in the countryThe biomass electric and nuclear power industries continue to expand to meet consumer and business needs. Instead of studying the successes of the free-market approach in Florida, the Biden administration is trying, once again, to legislate through regulation and taxes. Executive branch, through offices such as White House Office of Science and Technology Policy Agenciesand its affiliated agencies, such as the US Securities and Exchange Commission and the Commodity Futures Trading Commission (CFTC), are preparing to impose a heavy hand on the federal government in the name of “climate.”
Not only do many of these regulators lack the legal authority to participate in environmental policy-making, but they also ignore the tremendous advances that private industry has made and continues to achieve. Instead of stifling growth through onerous regulation, we must let the market do what it does best: innovate.
This is a guest post from Byron Donalds and Perianne Boring. The opinions expressed are entirely their own and do not necessarily reflect the opinions of BTC Inc or Bitcoin Magazine.