WASHINGTON, Jan. 20 (UPI) -- Lawmakers struggled Thursday to balance the energy consumption of the cryptocurrency mining process alongside the opportunities for blockchain technology at a House Oversight and Investigations Subcommittee hearing.
"Blockchain technology and cryptocurrencies hold great promise," House Energy and Commerce Committee Chairman Frank Pallone Jr. said.
The New Jersey Democrat added, "This hearing is not intended to stifle that promise or discourage innovation, but rather to examine the potential environmental costs of the crypto mining industry and what can be done to address those impacts."
The rise of the cryptocurrency industry has raised questions about its environmental sustainability. Testifying experts agreed that the proof-of-work method of blockchain technology consumes a large amount of energy, but disagreed on whether the method is wasteful and how to mitigate its potential climate effects.
The subcommittee's chair, Rep. Diana DeGette, D-Colo., who called the energy use of some cryptocurrency mines "deeply disturbing," said lawmakers should focus on "reducing carbon emissions overall and increasing the proportion of green energy in the network".
A blockchain is a globally readable digital ledger that contains all the transactions that have ever taken place with a particular cryptocurrency. The system consists of a chain of data units, known as blocks, created and validated by computers on a blockchain network. Each block contains information about the most recent transaction.
Decentralized technology does not require the involvement of a central authority, such as a financial institution. Instead, users record and validate cryptocurrency transactions themselves through a process called mining.
Blockchain miners verify the validity of a series of transactions to ensure that the senders have sufficient funds to complete the deal. Miners compete to be the first to accept their validation by solving a mathematical puzzle that cannot be solved by calculation. This validation process in mining is based on proof of work.
Proof of work is the algorithm that adjusts the difficulty and rules for mining cryptocurrencies. It is used by the two largest cryptocurrencies in the world, Bitcoin and Ethereum, although the latter will phase out proof-of-work over the next year.
"The Bitcoin community deserves our deep gratitude for introducing blockchain to the world. But we have much more energy-efficient alternatives to proof-of-work," said Ari Juels, a professor at Cornell Tech and Cornell University.
"For the sake of the environment and our energy infrastructure in the United States, I think we should embrace these new options," Juels said.
Using a consensus mechanism, proof-of-work allows all computers on the network to agree on legitimate transactions and ensures that no one spends the same money more than once.
