A Silicon Valley congressman says energy consumption from Bitcoin mining needs to be taxed
The mining of bitcoin and other cryptocurrencies, which have been in the spotlight recently due to their fluctuating valuations and investors, should be taxed for their considerable energy consumption, according to a Democratic congressman.
Bitcoin transactions require an enormous amount of energy. Dutch bank ING estimates that a single transaction consumes enough electricity to power a home for weeks. The expensive and energy-consuming verification process of transactions, otherwise known as mining, is meant to deter crime and fraud. Because Bitcoin and other cryptocurrencies rose to prominence in 2017, research claims the total energy consumption from last year was more than the annual usage of 159 countries.
And all that power usage - and its effect on the environment - is catching attention on Capitol Hill. In an interview with Business Insider, California Rep. Ro Khanna said that Bitcoin mining should be regulated in the same fashion as proposed carbon taxes.
"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," he said.
Khanna, who represents part of Silicon Valley, added that a tax on bitcoin transactions' energy consumption "would provide a disincentive" and "that mining that's being used for bitcoin, they need to be paying a price on it."
"Just like carbon, you need to have a price on carbon," he said.
And the need for regulation should not stop at the environmental effects of cryptocurrencies, according to Khanna, who said their are significant criminal aspects of the new technology.
"I think more broadly we need much more regulation, whether it's against fraud, whether it's against environmental harms, whether it's against the use of bitcoin to foster terrorism," he said. "We need to have much more regulation there and we need to see all the regulations that have come from last hundreds of years for the banks."