Bitcoin (BTC) mining has always been a controversial topic. But, Bitcoin’s proof-of-work (PoW) model has reached new levels of concern as senior decision-makers and investors pay closer attention to environmental, social and governance factors.
As such, many crypto miners are highlighting environmentally friendly practices by acquiring carbon offsets. Yet, some would argue that this isn’t enough to guarantee green Bitcoin mining. Other risk factors may also be involved with carbon credits.
For instance, Kevin O’Leary — the Canadian entrepreneur better known as “Mr. Wonderful” for his role on Shark Tank — told Cointelegraph that he typically indexes public mining companies like Marathon Digital Holdings, Riot Blockchain Inc. and others. However, O’Leary pointed out that once these companies claimed carbon neutrality through carbon offsets, their stocks dropped drastically. O’Leary believes this is because the United States Securities and Exchange Commission (SEC), may soon plan to audit carbon credits. O’Leary expressed his concern, stating:
“Carbon offsets are unauditable. So indexers like me dumped those shares — we had to sell. The only way institutions will now invest in Bitcoin mining is for those companies to claim there is no carbon involved at all.”
Bitcoin mining and data centers
In order to ensure zero carbon mining, O’Leary explained that Bitcoin miners should build in parallel with data centers. This would then allow mining companies to efficiently use excess energy omitted from data centers to mine Bitcoin, resulting in “zero carbon displacement,” a process that produces zero carbon emissions.
Bitcoin mining company Bitzero began implementing such a model two years ago in Norway. Akbar Shamji, CEO and founder of Bitzero, told Cointelegraph that the company initially built an infrastructure partnership with Norway’s local government two years ago that prompted the region to release unused hydroelectric power generation for Bitcoin mining:
“This was the perfect opportunity for us to test this idea. At the same time, big data companies started to use renewable energy sources in places like Norway, but this wasn’t profitable for the region. We’ve built a long-term, low-cost 100% zero carbon displacement power source to have an edge over the market. We hit revenue when we mined our first Bitcoin in December 2021.”
Being aware of the massive demand for data storage today, Shamji further explained that electricity generated from data centers should be properly harnessed. “We call this the ‘Norway model.’ Electricity generation is there but it remains stuck at high voltage. So, we executed the electrical step down from high voltage to low acquiring transformers and substation, allowing us to drive containers full of ASIC miners efficiently,” he remarked.
A group of eight organizations focused on the environment have called on different government agencies under the Biden administration to implement new approaches in response to Proof-of-Work and other crypto mining operations.
In a letter to the United States Office of Science and Technology Policy on Monday, the Environmental Working Group, Earthjustice, Greenpeace, the League of Conservation Voters, the Sierra Club, Friends of the Earth, the Seneca Lake Guardian, and the Milwaukee Riverkeeper urged the White House to enact policies aimed at curbing “the electricity use and climate pollution associated with digital currencies that rely on [PoW].” Specifically, the organizations alleged crypto mining in the United States harmed communities by creating increasing demand for electricity sourced by fossil fuels, threatened supply chains with demand for application-specific integrated circuits in rigs, created significant electronic waste, and would not “aid the transition to renewable electricity.”
The group of eight proposed the Environmental Protection Agency subject PoW mining firms to “stringent reviews” around operating permits “to mitigate the harms of cryptocurrency mining ewaste disposal in large quantities” as well as address claims of noise pollution allegedly caused by mining rigs. In addition, they requested the Office of Management and Budget’s Office of Information and Regulatory Affairs create a registry for many PoW mining operations in an effort for firms to “disclose their energy sources and quantities.”
Other recommendations included the Department of Energy implementing energy efficiency standards for PoW miners, with the limit tightened over time “to eventually eliminate” proof-of-work mining. However, the biggest ask seemed to be aimed at the Securities and Exchange Commission and Commodity Futures Trading Commission, requesting the financial regulators limit crypto exchanges to listing digital assets meeting certain “environmental and electricity standards” as well as push back against “misleading claims regarding the environmental impacts of digital currencies.”
“Requiring registered exchanges only to list digital assets whose transactions consume electricity below a certain energy-efficient standard would drive innovation or a transition to other methods of validation,” said the environmental groups.
New technologies may have rapid, dramatic effects on society, but they may also spread slowly and subtly. Blockchain-powered decentralized science (DeSci) is taking off after some years of gestation. Its impact is being felt not only in the rarified confines of high-tech labs but more broadly in the business world as well.
Psychedelics and longevity
Paul Kohlhaas, co-founder and CEO of Molecule — a platform for biotech decentralized autonomous organizations (DAOs) founded in 2019 — spoke about pharmaceutical research and its funding on the Zima Red podcast in April. “We believe it could be way cheaper, if it was coordinated in a better way,” Kohlhaas said of pharmaceuticals research. “I think there’s this cultural and bureaucratic problem.”
Kohlhaas compared blockchain in pharma to fintech in banking. “The banking industry has only started evolving in the past 10 years in the wake of fintech, because fintech is starting to really hurt their bottom line and take away customers,” he said.
Molecule allows researchers, biotech companies and universities to combine data and intellectual property (IP) rights into IP-nonfungible tokens (IP-NFTs), thus creating a new market. The holder of an IP-NFT could solicit funding to continue research activities, or an organization can reach an agreement with the IP-NTF holder to use the data and IP for its own purposes.
Funding may also find new outlets. Kohlhaas mentioned psychedelics research in psychiatry as a priority that he embraces personally, as well as longevity. “Longevity startups are currently funded by billionaires,” he said. “But I think there's a risk there. Because if like the richest people in the world live longer and longer and get richer and richer, that will fundamentally, in the long run, create an unjust society, because wealth isn't distributed.”
Research Hub is a platform for open-access research that chief operating officer Patrick Joyce compared to GitHub for scientific research. Joyce told Cointelegraph that the platform, which has the backing of Coinbase CEO Brian Armstrong, may eventually provide a serious incentive for open access publishing and to fund research in subjects that the National Science Foundation does not fund, such as quantum biology.
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