Crackdown against cryptocurrency: New York Bitcoin miner grilled on climate change

US Senator is pressing a Bitcoin miner about the impact of its operations on climate change, as part of her campaign to crack down on cryptocurrency mining.
By BLOOMBERG
| Updated on Dec 03 2021, 08:05 AM IST
This is the first time Warren has pushed a specific Bitcoin mining company for information. Cryptocurrency mining has come under fire for its increasing electricity consumption.
This is the first time Warren has pushed a specific Bitcoin mining company for information. Cryptocurrency mining has come under fire for its increasing electricity consumption. (REUTERS)

US Senator Elizabeth Warren is pressing a Bitcoin miner about the impact of its operations on climate change, the local environment and power prices as part of her campaign to crack down on wasteful cryptocurrency mining. Warren sent the letter to Greenidge Generation Holdings Chief Executive Officer Jeff Kirt on Thursday afternoon. Greenidge, which says it’s the first carbon-neutral Bitcoin miner in the U.S., has one mine in upstate New York and is planning another in South Carolina.

“Given the extraordinarily high energy usage and carbon emissions associated with Bitcoin mining, mining operations at Greenidge and other plants raise concerns about their impacts on the global environment, on local ecosystems, and on consumer electricity costs,” Warren, a Democratic U.S. senator from Massachusetts, wrote in the letter.

This is the first time Warren has pushed a specific Bitcoin mining company for information. Cryptocurrency mining has come under fire for its increasing electricity consumption, which has grown to almost as much as the entire country of Argentina uses.

Greenidge will respond to Warren to set out how “the facility meets all of New York’s nation-leading environmental standards, is bringing economic opportunity to an under-served area of the state and is a model for crypto mining with widespread local support,” the company said in a statement.

Controlled by private equity firm Atlas Holdings LLC, the company uses zero- and low-carbon sources of electricity for its mining operations and buys carbon offset credits, according to its website. The power plant that provides electricity for its New York mine burns natural gas. 

“We need to better understand how much energy facilities like Greenidge are using, how much they’re emitting into the environment, and what impact they’re having on electricity prices for American consumers,” Warren told Bloomberg News in an email.

Luna Surges as Token Becomes the ‘Latest Shiny Thing’ in Crypto

(Bloomberg) -- Terraform Labs’ Luna token is climbing into the ranks of the largest cryptocurrencies amid changes in how the coin is used for its blockchain payments network and optimism about the potential for decentralized applications.

Luna has jumped about 60% in the past seven days, according to pricing from CoinGecko, making it the 12th-largest cryptocurrency with a market value of around $25 billion. The surge comes as Singapore-based Terraform is embroiled in a dispute with the U.S. Securities and Exchange Commission over whether the platform is selling unregistered securities.

The Terra protocol deploys algorithmic, fiat-pegged stablecoins -- tokens that aim to link their value to an asset like the U.S. dollar -- to underpin a decentralized finance (DeFi) ecosystem. That ecosystem includes apps like Anchor, Pylon and Mirror Protocol. Terraform’s Mirror Protocol triggered the SEC probe by offering digital tokens mirroring U.S.-traded stocks.

“Crypto is all about creating a buzz and there’s a lot of attention on the Terra ecosystem, be it for DeFi innovation, stablecoin products, a recent network upgrade or Luna staking,” said Antoni Trenchev, co-founder of crypto lender Nexo. It’s “the latest shiny thing in the crypto space, following in the footsteps of other blockchains like Solana and Avalanche, all which have witnessed explosive gains in the past year.”

A governance proposal for the network was recently approved to destroy, or burn, about 88 million Luna from the community pool, swapping it for UST, Terra’s stablecoin. UST itself now has a market value of $7.7 billion, compared with $2.9 billion on Nov. 10. Developers of cryptocurrencies often burn coins to increase scarcity.

“Luna’s economics are built to be deflationary, and over the past month we’ve seen 100 million Luna tokens be burned, which removes them from supply forever,” said Hayden Hughes, chief executive officer of Alpha Impact, a social-trading platform. “This reduction in supply combined with the popularity of Luna staking (where staking participants get new tokens) has created a supply shock that has driven up the value.”

In addition many regulators globally, including in the U.S., have expressed interest in boosting the regulatory framework around stablecoins.

“Mostly everything we do as a company supporting the Terra ecosystem and third-party projects that build and develop creates more demand for UST, closing the ‘demand loop’ with many use cases for UST ranging from payments, to savings, and investing,” said Brian Curran, head of communications at Terraform Labs. “As a result, Luna’s price dynamics are mostly a function of the demand for UST, and by extension, the demand for using UST across various applications and blockchains.”

Luna may also be getting a boost as so-called cross-chain bridges like Wormhole have begun gaining traction and are allowing Terra to export UST to other blockchain networks where it’s supported. In addition, Terra has started some partnerships for Metaverse games, with names like Summoner’s War. Terra ranks fifth in smart-contract chains by total value locked, with around $12.6 billion, according to DefiLlama.

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First Published Date: 03 Dec, 08:05 AM IST
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