The Scarcity Mindset Driving Crypto's Energy Critics

The DeFi Education Fund weighs in on the New York state legislature's attempt to curb proof-of-work mining, and dreams of energy abundant future.

AccessTimeIconMay 5, 2022 at 7:38 p.m. UTCUpdated May 5, 2022 at 7:41 p.m. UTC
AccessTimeIconMay 5, 2022 at 7:38 p.m. UTCUpdated May 5, 2022 at 7:41 p.m. UTC

Miller Whitehouse-Levine is policy director at DeFi Education Fund.

The New York State Assembly may be the latest legislative body to consider banning proof-of-work mining – but it likely won’t be the last.

The persistent criticism of cryptocurrency mining’s energy consumption reflects a deeply pessimistic perspective: No amount of energy consumption by crypto will ever be permissible because society cannot afford to waste energy on this kind of technology.

Miller Whitehouse-Levine is the policy director at the DeFi Education Fund.

According to crypto’s skeptics, even one joule is too much to spend on crypto. But this pessimism is mistaken – not least because it does not accurately reflect the overall consumption trends in crypto mining.

At its heart, concern over crypto’s energy consumption is wrong because it advances an outdated, practically Malthusian scarcity mindset about energy production and consumption overall.

Why are we haggling over who consumes this or that ever-so-scarce kilowatt of electricity, when the technology for energy abundance is already here? This isn’t the 1970s; we don’t have to ration.

We can, instead, focus our policy and regulations on creating an energy abundant future – a future in which energy is too cheap to meter and everyone can have a little crypto, as a treat.

Actual abundance

Energy abundance is the right way to address energy consumption concerns, and not just because it will silence crypto’s critics, but because it is the only way to improve a whole host of other issues as well. We know that increases in energy consumption per capita lead to improvements in the quality of life for everyone across a number of metrics; over the last two hundred years, every improvement in the standard of living has strongly correlated with per-capita consumption.

Yet, in recent decades, energy consumption per capita has hovered at about the same level. Much of that can be attributed to encouraging increased efficiency standards, but that isn’t the whole story. Time and again, environmentalists and energy consumption critics have shut down, blockaded or otherwise just plain stigmatized increases in production and consumption.

The reduce, reuse, recycle mindset has dominated energy and environmental discussions for decades. Rather than helping us imagine how much better the future might be in a world of abundance, today’s advocates and activists want us to make heavy sacrifices in our lives now, in the hope that the future will be slightly less terrible – if we only kept energy use down.

That’s hardly an inspiring political and social vision; cut back now and you might eke out an OK life down the road.

Real concerns

Powerful interest groups embracing this preservation-first and scarcity-based mindset are holding back our potential abundant future on several fronts. Take New York as one example.

The Sierra Club in New York has adamantly opposed any expansion of bitcoin mining in the state, citing the environmental impact of Bitcoin’s energy consumption rates. At the same time, it has opposed energy projects like New York City’s plan to build transmission lines to bring hydroelectric power from Canada into the city. It would seem that neither low-to-zero carbon energy sources nor new developments of financial technology that would benefit their fellow citizens is a worthwhile investment for anti-abundance environmentalists.

When crypto’s defenders try to argue against these interest groups, they’re adopting a false framing of the issue. Why are we trying to justify crypto’s energy consumption at all?

We should, instead, be asking politicians and activists what their plans are to multiply by 100 the amount of zero carbon energy available to humanity in the years to come. We should all be asking ourselves, how do we invest in a world where energy is so cheap and so abundant that we can mine as much crypto as we want and operate as broad and extensive networks as necessary, without needing to count costs?

This shouldn’t be beyond the scope of our collective imagination. In fact, we’ve already imagined it in "Star Trek."

"Star Trek" offers a compelling vision of a utopian future where the civilization of the 24th century has a superabundance of available energy and spends it on galactic-level hobbies, building spaceships and exploring the galaxy – instead of political infighting (well, there is some).

While that world’s warp drives are more fiction than science, we possess all of the necessary technology right now to electrify our entire world and tackle some of humanity’s toughest challenges.

Crypto’s energy usage is a small bore issue with a lot of emotional, political and social valence. We should work toward a world where we have so much energy available that the debate about consumption fades away and we can finally move on to the more important questions about improving quality of life for everyone on the planet through energy abundance.

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Miller Whitehouse-Levine is policy director at DeFi Education Fund.