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Environmental, Social and Economic Impacts of Cryptocurrency Mining

Author: Leo Price
The White House recently made its opinion clear on the energy consumed by cryptocurrency miners to power validation of transactions on blockchain networks. A proposed 30% excise tax was included in the White House’s 2024 budget, which is estimated to reduce the government's deficit by $74 million in the first year of implementation, and potentially reach up to $444 million by 2033.

Crypto miners in the U.S. reportedly consumed 50,000 gigawatt hours of electricity in 2022 between Bitcoin and Ethereum, indicating the significance of this energy concern. The proposed tax would require miners to declare the amount of electricity their operations use, where the energy comes from, and its associated value.

In addition to environmental concerns, the White House report suggested that currently, the social benefits of cryptocurrency mining has yet to materialize. This argument sparked widely varying opinions on Twitter. Investment firm a16z’s Head of Policy Brian Quintenz questioned the focus on electricity instead of carbon emissions. Presidential candidate Robert F Kennedy Jr., seemingly taking a more favorable stance on crypto, argued that the energy argument was a pretext to suppress new technologies.

Little is known after the proposal of the tax, but these reactions indicate a diversity of thought on the matter. It is likely that the public consensus on the implications of the proposed tax will depend on the increased understanding of the environmental, social and economic impacts of cryptocurrency mining.

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