Politicians across North America worry about what the energy use of crypto, artificial intelligence and other data centers could mean for the affordability of ordinary customers, but crypto investment firm Paradigm argues that the government should leave bitcoin mining out of it.
That mining bitcoin takes a huge amount of electricity. But the business model only works when that energy is particularly cheap – such as when it is provided by off-peak renewables – and can be given back at the times when it is most needed by the public, according to a report produced by Paradigm, which has miner Genesis Digital Assets in its investment portfolio.
The report, seen by CoinDesk, disputes widely shared claims about bitcoin mining’s energy consumption and waste problems by citing data that the sector actually uses about 0.23% of global energy and emits about 0.08% of carbon. And the miners have to operate below a “break even” price per megawatt-hour of electricity to make a profit.
“This means that Bitcoin mining inherently counterbalances the bulk of the average community’s energy use, bringing balance to the grid — not strain,” according to the report prepared by Justin Slaughter, vice president of regulatory affairs at Paradigm, and Veronica Irwin. “In a word, it brings balance to our energy power.”
Federal and state policy efforts have begun to pile up that would attempt to restrict data centers and digital mining, which could arguably fit under the “data center” definition in US law. On Thursday, U.S. Senators Richard Blumenthal, a Democrat from Connecticut, and Josh Hawley, a Republican from Missouri, introduced a bill to prevent data centers from driving up electricity costs for consumers, although the bill does not explicitly mention bitcoin or crypto. Lawmakers in New York state have similarly pursued a data center moratorium.
“Artificial intelligence (AI) and cryptomining are fueling a growing demand for energy driven by massive, energy-intensive data centers,” several Democratic US senators wrote in a November letter to the head of the Federal Energy Regulatory Commission, asking for “immediate action” to protect consumers.
In Canada, British Columbia said in October that it planned to cut new crypto mining from its power grid.
The Paradigm report countered, “Bitcoin miners who use energy that would otherwise be wasted, or who participate in government-led programs to give energy regulatory agencies more control over the grid, should be rewarded for their good behavior.”
