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Seattle Journal of Technology, Environmental & Innovation Law

Keywords

Bitcoin, cryptocurrencies, mining, energy, regulation, economic

Abstract

The use of cryptocurrencies in daily life has continued to rise over the last decade and shows no signs of slowing down. Although cryptocurrencies, such as Bitcoin, provide numerous tangible benefits to society, the process of mining these cryptocurrencies is extremely energy intensive. Accordingly, a tragedy of the energy commons has resulted whereby the monetary incentive to mine cryptocurrencies has distorted our collective ability to care for our shared energy resources. The current system allows for industrious individuals to set up cryptocurrency mines in regions that have access to plentiful and cheap energy sources, utilize this energy to power their mining activities, and leave the region when the energy becomes more expensive than other regions. This system forces regions with an abundance of energy to deal with the negative consequences of cryptocurrency mining without receiving any of the benefits. Furthermore, individual states and regions refuse to regulate such mining activity out of fear of depressing economic investment. Thus, as this article argues, a federal cryptocurrency regulation regime is needed to combat the inequities that result from the current lack of adequate protections.

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