Bitcoin Community Sends Letter to EPA Debunking Proof of Work FUD

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Several Bitcoin communities and industry leaders have issued a letter to the Environmental Protection Agency (EPA) to clear up confusion and educate the public about Bitcoin’s power consumption. Among its 55 signatories are MicroStrategy CEO Michael Saylor, and “Block Head” Jack Dorsey.

Proof of Stake is Not the Answer

The letter – shared by the Bitcoin Mining Council – was designed as a response to a previous congressional request to review mining facilities’ compliance with the Clean Air Act and the Clean Water Act.

Specifically, the request alleges that proof of work mining facilities are “poisoning communities”, by creating massive greenhouse gas emissions, electronic waste, and “noise pollution”. It also claims that the consensus mechanism itself is “inherently energy inefficient”, and cites proof of stake as an alternative, cleaner “mining technology”.

The Bitcoin industry’s response, however, deems several of these claims to be misleading. Firstly, it corrects congress’s conflation of data centers with power-generation facilities. Datacentres that host miners simply buy pre-produced energy off the open market, just like Amazon, Apple, and Microsoft.

What’s more, it discusses problems surrounding the proof of stake consensus mechanism at length:


“Proof of Stake is not a ‘mining technology’,” it states. “It is a technique to determine authority over a distributed ledger, but it does not achieve decentralized distribution.”

At a basic level, proof of work requires network users to spend energy competing for the right to construct Bitcoin’s next block. By contrast, proof of stake grants block creation rights to those that stake the largest amount of their existing crypto holdings, without the need to consume power.

Many within the crypto industry, including Ripple and Solana co-founders, argue that Bitcoin should adopt the latter mechanism due to its greater efficiency.

However, the council’s letter maintains that proof of stake lacks a proven track record, has “single points of failure”, and is less reliable to “govern a global, apolitical monetary system”.

By contrast, the members claim that proof of work’s energy consumption isn’t as bad as it’s made out to be. For one, while congress stated that coal and gas facilities are being re-opened to mine Bitcoin, the letter clarifies that the general trend among the industry is actually in the direction of renewables.

Patently False Claims

Though much of the initial letter was merely “misleading”, the council deemed congress’s claims about Bitcoin’s e-waste to be “straightforwardly false”. Their letter cited a paper by Alex de Vries – an economist at the Deutsch Central Bank – which estimated that mining ASICs depreciated every 1.3 years on average. This led to the theoretical estimation that miners create 30,700 tons of electronic waste every year.

In reality, there is currently an active market for old Bitcoin mining machines. For example, s7 and s9 ASICs from Bitmain are still visible on the blockchain accounting for significant portions of Bitcoin’s hash rate. These machines were released in 2015 and 2016, respectively.

The council also corrected the claim that a single Bitcoin transaction could “power the average US household for a month”. In reality, Bitcoin transactions consume little more electricity than a Google search and are not redeemable for energy.

Those consuming energy on the network do so to compete for newly created coins and transaction fees. Almost all of the current miner revenue comes from the former right now, making the ‘per transaction’ energy cost analysis of Bitcoin deeply flawed.

The letter concludes by asserting that Bitcoin mining does not raise environmental issues, but is instead “the most important financial, economic, and accounting innovation in the history of humanity.”


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