Bitcoin OGs are skeptical of a report published by the Environmental Working Group (EWG) on Wednesday, detailing how Bitcoin miners are “polluting” communities across the United States.
Working through six case studies, the non-profit group says it has documented how the mining industry is interfering with the day-to-day life of Americans through air, water, and noise pollution.
“The incessant din created by mining operations continues 24 hours a day, seven days a week, and is driving nearby residents to desperation,” the report stated. One of its case studies followed a married couple in Cook County, Georgia, whose hearing has reportedly been “damaged” thanks to one of Blockstream’s neaerby Bitcoin mining facilities.
Another case study focused on Stronghold Digital Mining in Venango Country, Pennsylvania. The company combusts coal refuse to power Bitcoin mining machines, then spreads the leftover coal ash over land areas to be used as fertilizer. EWG argued that the toxic pollutants within that ash fertilizer are carried into nearby rivers and streams when it rains, thereby polluting the water.
“What these mines have in common is their use of proof of work, which is wasteful by design,” the report asserted, calling it “highly inefficient” to require vast amount of “fossil-fuel generated electricity” to operate.
Proof of work is a consensus mechanism used by Bitcoin and other decentralized blockchains that allows all network participants to agree on the sequential order of transactions, while also issuing new coins in a non-subjective manner. Powerful computers compete in a race to construct Bitcoin’s next block of transactions by solving a complex math problem and are rewarded with new BTC for solving it first.
Many modern blockchains use an alternative consensus mechanism called proof of stake, which uses cryptocurrency rather than energy to secure the network. EWG has long called for Bitcoin developers to change its code and cut its energy use in a similar fashion, backing another well-funded environmental campaign to do so.
However, prominent Bitcoin developers are not remotely interested in such a high-stakes protocol change. Blockstream CEO (and suspected Bitcoin creator) Adam Back says energy costs for producing new Bitcoin are necessary for it to function as money.
“People are buying digital gold, to protect against inflation and monetary erosion. Central banks are buying physical gold for similar reasons at a record pace,” he said to Decrypt via Twitter. “Gold is costly to mine analogously, and that's also inherent to hard money.”
When asked by EWG about Blockstream’s noise pollution, Blockstream mining head Chris Cook described the facility as “barely audible... crickets are definitely louder.”
Long-time Bitcoin developer Luke Dash Jr. also contested that Bitcoin was a source of environmental harm, arguing that the fiat currency system is much more harmful.
“PoW is actually good for the environment,” he told Decrypt via DM. “It makes clean energy like solar viable on its own, where previously it would typically require fossil fuel to compliment it.”
Meanwhile, the developer dismissed proof of stake as a “scam,” referencing a 2015 essay describing the system as “unworkable.”
“By depending only on resources within the system, proof of stake cannot be used to form a distributed consensus, since it depends on the very history it is trying to form to enforce loss of value,” stated the report’s author Andrew Poelstra.