US Senators Raise Crypto Mining Concerns, Propose Government Blockchains

The U.S. Senate Committee on Energy and Natural Resources hosted a hearing Tuesday on the "energy efficiency of blockchain and similar technologies."

AccessTimeIconAug 21, 2018 at 8:00 p.m. UTC
Updated Sep 13, 2021 at 8:18 a.m. UTC

Members of the U.S. Senate Committee on Energy and Natural Resources asked about the cost of cryptocurrency mining and the opportunities for blockchain in the public sector on Wednesday.

Like other crypto-related hearings on Capitol Hill, the hearing – which featured a range of public and private-sector speakers – served in part as an informational session for lawmakers who aren't very familiar with the technology.

In contrast with past Congressional hearings which at times turned acrimonious toward the concept of blockchain and cryptocurrencies, senators on the Energy Committee largely inquired about how blockchain can be applied to various projects.

The people giving testimony were Robert Kahn, CEO and president of the Corporation for National Research Initiatives; Paul Skare, chief cybersecurity and technical group manager of the Pacific Northwest National Laboratory; Thomas Golden, program manager of technology innovation at the Electric Power Research Institute; Claire Henly, managing director of the Energy Web Foundation; and Arvind Narayanan, an associate professor of computer science at Princeton University.

In remarks, committee chair Senator Lisa Murkowski of Alaska noted the "hearing will examine any cybersecurity advantages that blockchain and similar technologies might offer over other ways of securing our energy infrastructure."

Mining concerns

The foremost risk discussed at the hearing revolved around the energy needs of cryptocurrency miners. Networks relying on proof-of-work – which require the expense of energy to prove that "work" has been completed – generally require large amounts of energy, such as the bitcoin blockchain, according to Golden.

The witnesses estimated that public blockchains may be using anywhere from one to as much as five gigawatts worldwide, though, as Golden contended, "this is less than 0.1 percent of the global power usage."

Murkowski remarked that growing demand on the local level from new crypto mining farms can cause stress for utility providers, and may even damage the electric grid. Her concern is that this may translate to increased costs for the provider's customers.

She asked:

"Can we anticipate the consumer rates and the concern that some might have that, 'my family and I might not be the ones that benefit from blockchain and bitcoin and yet I'm wondering are my rates going to be expected to pay for this infrastructure?'"

Senator Steve Daines similarly asked how communities can prepare for mining farms moving onto their power grids.

Golden said power utilities should begin having discussions with their communities about providing power for these companies, as a start to solving the infrastructure issue.

But even reinforcing some localities' grids may not be enough. Henly noted that "bitcoin's energy use is a substantial concern … we know that bitcoin's energy use will prevent it from being able to scale."

Her solution was to look at alternatives to PoW, noting that while they require large amounts of power, proof-of-stake and proof-of-authority algorithms are far more energy efficient, and can pose as feasible alternatives to scaling a blockchain without requiring large amounts of power.

Security questions and federal blockchains

At various times during the hearing, the conversation turned away from perceived problems and toward how blockchain could be applied to the energy sector, including for tracking shipments, validating security protocols or building on other existing technologies.

"I'd like to hone in on the security aspect, because I think it's one of the most important here today," Senator Maria Cantwell remarked during an opening statement.

At other points, the senators sought to clarify for themselves different aspects of the technology's elements. Senator Catherine Cortez Masto, for example, asked about transaction privacy and whether law enforcement officials could be hindered in carrying out their duties.

Senator Bill Cassidy notably asked about specific uses for the U.S. government, asking if it is technically feasible to develop a blockchain for federal governments to track shipments sent from one nation to another. Narayanan confirmed that such a platform is feasible, but would require participation from whichever nations are involved.

And while, like previous hearings, no firm conclusions were reached, Murkowski noted that the hearing was educational for the committee's members – perhaps setting the stage for more queriers to come.

Lisa Murkowski image via Energy Committee livestream


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