Hundreds of theories have been used to kill Bitcoin and write it off as non-viable technology, the latest among them is the energy consumption. The bitcoin non-believers have come up with a new argument that the energy consumed to do bitcoin mining is too much for it to viable in the longer term as it scales.
Part of the argument is true that the Bitcoin mining consumes a lot of energy and this is part of the reason why China is driving the bitcoin miners with huge farms of ASIC servers to other countries. With the population of more than a billion, sometimes the total production vs consumption of electricity goes off the balance and on top of it if there are large bitcoin mining farms consuming more electricity sometimes than an average city, regulators would worry about the future.
The United States, on the other hand, has been more open to the idea of bitcoin and have not tried to regulate the exchanges or the mining farms, but as more and more people are holding bitcoin and the price shooting to the roof, the lawmakers are slowly shifting the attention towards the energy consumption for cryptocurrency mining.
In an interview with BI Publication, Ro Khanna has said, “You could have environmental regulations of what could be used or a tax on the use of the mines that are going into the bitcoin, so that if they have externalities that they’re causing the environment, that they have to pay a tax on that”.
The idea is based on the argument that, just like fossil fuel consumption is taxed, taxing the cryptocurrency mining, in general, would quell the idea of bitcoin mining taking away important electricity. Another argument is whether small bitcoin miners who set up their mining rigs at home should be identified and charged business rates instead of residential tariff for electricity consumption.
The energy to record the transactions on the blockchain being currently spent is relatively very low at the moment because of the increased transaction times but as the number of transactions increases, the current model would be unviable.