With Regulatory Understanding, Bitcoin Mining Could Boost Florida’s Energy Future

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This is an opinion editorial by Byron Donalds, US Representative from Florida’s 19th congressional district, and Perrian Boring, founder and CEO of the Chamber of Digital Commerce.

There are many reasons for businesses to relocate to Florida, the welcoming regulatory and tax environment and the skilled and ready workforce among them. And these are certainly some of the reasons many companies are involved in the digital asset ecosystem. blockchain.com, okcoin, capital without borders And blocktower capital – have moved out of traditional tech areas like California, New York and the Pacific Northwest for Florida’s friendly sunshine and encouragement.

But there’s another reason digital asset companies are looking to Florida: the Sunshine State’s reliable energy grid and its growing leadership in sustainable energy, from solar power to biomass power to nuclear power. That’s because one of the building blocks for 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 could foster the innovation needed for bitcoin.

Proof of Work first introduced Email as a means of reducing spam in the early 1990s, The idea was that the computer would need to do a small amount of work before sending the email to verify the authenticity of the message and prevent spam. This task would be minimal for someone sending bulk emails, but for users sending spam emails on a large scale it would require a lot of computing power and resources. 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 at bitcoin mining data centers to validate blocks is critical to ensuring the security of the blockchain. It also ensures that block production remains decentralized. There is no inherent advantage to those who would have started bitcoin mining in the first place difficulty adjustment This ensures that bitcoin miners who started 10 years ago compete on an equal footing with the new miners joining today.

Is bitcoin mining harmful to the environment?

It is estimated that bitcoin mining Uses 140 terawatt-hours (TWh) of electricity per year and consumes about 0.22% of global energy, Some, particularly within the executive branch, are calling for broader limits, if not a complete ban, on mining. suggesting that overuse of energy is harmful to the environment, This is short-sighted and wrong. Eliminating all bitcoin mining won’t produce any meaningful reduction in carbon emissions, and could actually slow down progress in transitioning this country to more renewable energy.

Simply put, bitcoin mining can be an asset to energy development and the modernization of our energy infrastructure. early 2021More than 50% of the bitcoin network’s computing power, known as its hash rate, was located in China and 13% in the United States. By July 2021, China bans bitcoin mining and the United States’ share of the network’s hash rate increased to 35%, Today, bitcoin mining continues to grow in the United States, mainly States with a regulatory-friendly environment and excess renewable energy, in 2021Bitcoin mining efficiency improved by 53% globally, and the percentage of the industry powered primarily by sustainable electricity increased from 37% to 59%.

How is bitcoin mining modernizing energy resources?

The transition to green energy sources requires significant investment in new energy technology. Proof-of-work miners serve as trusted base clients that provide consistent demand and revenue for utilities to build clean energy infrastructure. An added benefit: They can shut down significant power use almost immediately to redeploy elsewhere, something other high-demand industries simply can’t do.

For example, on occasions when customer demand increases, bitcoin miners may work together with utilities to reduce their demand. The electricity used by proof-of-work miners flows back into the grid, providing additional capacity in mere minutes without any adverse effects to retail consumers. Any other industry that uses similar levels of energy – including other data centers, cloud service providers and manufacturing facilities – does not have the ability to do so.

An example of a state that has embraced these opportunities is Texas, where the electric grid is governed by the Electric Reliability Council of Texas, or ERCOT.

“Bitcoin miners provide a valuable additional tool for ERCOT’s operators during tight supply conditions: a flexible load that can be shut down so that needed power can flow to our most vulnerable customers,” brad jones saidFormer CEO of ERCOT.

It is also important to note that, even though bitcoin mining has increased productivity over the years, the Bitcoin Mining Council estimates that the global mining industry’s sustainable power mix is 58.5% and rising, making it one of the most sustainable industries in the world. This sustainability effect will only increase over time as bitcoin miners form partnerships with energy providers, utilities, communities and other groups to develop new energy capacity.

Florida is at the forefront of the energy revolution. Our state’s solar industry is now top five in the country, and our biomass power and nuclear power industries continue to expand to meet consumer and commercial needs. Instead of studying the successes of Florida’s free market approach, the Biden administration is, once again, attempting to legislate through regulation and taxation. executive branch, through offices such as White House Office of Science and Technology Policy AgenciesAnd its subordinate agencies, such as the US Securities and Exchange Commission and the Commodity Futures Trading Commission (CFTC), are preparing to heavily tax the federal government in the name of “climate”.

Many of these regulators not only lack the statutory mandate to engage in environmental policymaking, but they also ignore the tremendous progress that private industry has made and continues to make. Instead of blocking growth through cumbersome regulation, we should let the market do what it does best: innovate.

This is a guest post by Byron Donalds and Perian Boring. The opinions expressed are solely his own and do not necessarily reflect the opinions of BTC Inc. or Bitcoin Magazine.