Mining Council Opens ‘Interesting Can of Worms’

After a few major figures in crypto met together to propose a BTC mining council, there has been a variety of responses that take different views.

By
Chung Yee
on
May 26, 2021
Category:
Blockchain News

The Council

On Monday Micheal Saylor and Elon Musk, two of the most prolific individuals in the crypto space announced that a Bitcoin Mining Council could improve the leading cryptocurrency’s sustainability. This announcement was met with mixed responses from industry players and Sam Bankman-Fried, CEO of the FTX cryptocurrency exchange, likened the effort to an ‘ interesting can of worms’

The Quest towards Sustainable Energy

Two influential individuals in the crypto industry talking about a Mining Council for Bitcoin will certainly draw a lot of attention.

Not too long ago, the CEO of Tesla, Elon Musk took a 180-degree turn in announcing Tesla will no longer accept Bitcoin as payment, citing environmental concerns. His concern is none other than the carbon emission caused by the use of coal in Bitcoin mining. But the eccentric billionaire was also quick to announce that Tesla has not disposed of any of its Bitcoin holding. If it suddenly dawned upon Elon that Bitcoin’s proof-of-work consensus mechanism is bad for earth, why wouldn’t he relinquish any association with it?

This has led many to speculate that the attention grabbing headline was meant to focus on an alternative that Musk could be working on. It is no secret that Tesla aspires to make the world transition towards renewable energy. It did not take that long before the cat was let out of the bag when Micheal Saylor announced that he had just hosted a meeting between Musk and the leading bitcoin miners in North America. 

Elon Musk was optimistic of the new proposal and took to Twitter to confirm the same. 


The Bitcoin Energy FUD 

February 8, 2021 - Tesla announced in a SEC (Securities and Exchange Commision) that it has purchased $1.5 billion worth of Bitcoin. 

March 24, 2021 - Elon Musk announced that Tesla can be purchased using Bitcoin. 

May 13, 2021 - Elon announced that Tesla will stop accepting Bitcoin as a form of payment citing the use of fossil fuel in mining . 

The flip flop by one individual has caused the market to tank. At the same, it also raised an age-old criticism of Bitcoin, the use of unsustainable energy for its mining activities. 

Source

How Can A Bitcoin Mining Council Solve the Energy Criticism?

In an article by Coindesk defining what the council as explained by one of the founding members, 

Bitcoin Mining Council has no intention of altering the cryptocurrency’s software and merely wants to promote sustainable energy practices and transparency in the industry...

This effort of collectively gathering the miners albeit at the moment consists of North America miners, begs a further existential question as Sam Bankman-Fried said

If you have a completely open network and the big open players on this open network openly and without any coercion decide to collaborate with each other, is that decentralization? It’s a little bit of a definitional issue.

Micheal Saylor described the Mining Council as a loose association of bitcoin miners seeking to improve on sustainable practices. This also includes transparent disclosures on energy usage. Whilst these broad based objectives are utopian concepts, it could be a start towards better accountability mining practices. 


No, It Has Not Solved Anything... Yet

Two charismatic leaders, revolutionary in their vision and spearheading a common cause, is definitely a step in the right direction. Moreover, the cause here relates to probably one of the most disruptive technologies that we have seen in our lifetime. Whilst many detractors are skeptical of Elon Musk’s sincerity after his infamous flip flop, the intention here is commendable. If successful it will fend off Bitcoin’s largest and most damning criticism, but there are many issues left to iron out. Rome was not built in a day, and neither is a sustainable solution that solves all of cryptocurrency’s current issues.

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Chung Yee

Chung Yee has a legal background and has been involved in research works for the legal and compliance industry. Writing is his passion, centered on topics such as the blockchain and finance.

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