Four Cornell faculty members from across disciplines gave unambiguous testimony Oct. 27 to the New York State Assembly about how firing up once-shuttered carbon-based power plants – to create enough energy to process cryptocurrency – could bring about environmental chaos for the state.
Cryptocurrency uses an enormous amount of computer space and energy to process, or “mine,” transactions. Cryptocurrency consumes so much energy, in fact, that digital currency companies now seek to reopen old carbon-fueled power plants to supply energy for their specialized computers.
The faculty testifying before the Assembly’s “Hearing on Cryptocurrency Mining,” chaired by Assemblyman Steven Englebright, D-4th Dist., and organized by the standing committees on environmental conservation, energy, science and technology, and climate change were:
- Eswar Prasad, the Nandlal P. Tolani Senior Professor of International Trade Policy at the Charles H. Dyson School of Applied Economics and Management;
- Robert Howarth, the David R. Atkinson Professor of Ecology and Environmental Biology in the College of Agriculture and Life Sciences;
- Anthony Ingraffea, the Dwight C. Baum Professor of Engineering Emeritus; and
- Ari Juels, the Weill Family Foundation and Joan and Sanford I. Weill Professor at the Jacobs Technion-Cornell Institute at Cornell Tech.
By some estimates, Bitcoin mining accounts for about 1% of global electricity consumption, Prasad told the legislators. Validating a single bitcoin transaction, through a process known as “proof-of-work,” requires enough energy to power an average U.S. household for about a month.
“The process of mining for bitcoin has major environmental consequences,” he said. “Miners now require huge arrays of computers that suck up large amounts of electricity simply to try to be the first to crack the complex numerical problems that yield rewards in the form of bitcoin.
“This means that vast amounts of computing power and energy are devoted simultaneously to solving the same problem,” Prasad said, “and the solutions to these problems offer no material benefit to humanity.”
Ingraffea said that reengaging mothballed power plants could substantially negate New York’s 2019 Climate Leadership and Community Protection Act (CLCPA), establishing that the state will reduce greenhouse gas emissions by 85% from 1990 levels by 2050.
Currently, one such carbon power plant for cryptocurrency processing exists in Dresden, New York, in Yates County, where its representatives said that to comply with the CLCPA, they could install 17 megawatts of solar power, reducing carbon dioxide emissions by 18%.
Ingraffea told members of the Assembly that the energy plant group failed to account for the “capacity factor of solar” in upstate New York, which is .15. “They would not be reducing their emissions by 12% to 18%, as incorrectly claimed,” he said. “They … would reduce [the emissions] by about 2.5%.”
If all five former power plants in upstate New York are permitted to reopen for cryptocurrency operations, using natural gas, Ingraffea said the estimated annual emissions could exceed 18 million metric tons of carbon-dioxide equivalent, or more than 8% of the New York State 2030 target of 250 million metric tons of greenhouse gas emissions.
Howarth, who sits on the state’s 22-member Climate Action Council helping to enact the CLCPA, said the state’s new law has global import.
“It’s putting New York on the global leadership front, because our targets actually are largely consistent with [United Nations goals],” he said. “We’re one of the few governments anywhere that’s done that.”
If the shuttered power plants open, it means fueling them with natural gas – and leaking methane in the process, Howarth said.
“We now know that methane is more than 100 times more powerful than carbon dioxide,” he said. “We know that about 30%, perhaps even 40%, of all of the climatic warming globally to date has come from methane and not just from carbon dioxide … We really need to reduce methane emissions.”
Meanwhile, the professors critiqued “proof-of-work,” bitcoin’s energy-intensive transaction validation protocol.
“Bitcoin has failed in its stated purpose,” Prasad said. “It is a very volatile medium of exchange. And moreover, the bitcoin network cannot handle a large volume of transactions and it is relatively slow to process transactions.
“Somewhat ironically,” he said, “bitcoin has become something it was not designed to become, which is a speculative financial asset.”
Any economic benefits from the cryptocurrency operations in New York state would potentially flow to miners in lower-tax jurisdictions, Prasad said.
“From an economic perspective,” he said, “I see many detrimental consequences for New York, both in the short run and in the long run, and very few economic benefits flowing from it.”
Juels, one of two authors on a 1999 paper that first introduced and formalized the term “proof-of-work,” said there are viable alternatives to that method that consume far less energy.
“Consider ways to discard proof-of-work-based mining in the various forms of legislation you’re considering,” Juels said, adding that not all blockchain is Bitcoin. “I don’t think we should throw the baby out with the bathwater … but Bitcoin mining itself should be discouraged.”
The New York Senate on June 8 passed a bill (S6486B), sponsored by Sen. Kevin S. Parker, D-21st Dist., for a moratorium on consolidated operations that use proof-of-work authentication methods to validate blockchain transactions. Ithaca Assemblywoman Anna Kelles, D-125th Dist., has sponsored the Assembly’s version (A7389-B) of the bill.
Howarth and Ingraffea are fellows in the Cornell Atkinson Center for Sustainability.