Ted Cruz, a vocal champion of cryptocurrency, recently spearheaded efforts that culminated in the first crypto bill becoming law – overturning a Biden-era IRS rule. He’s leading the charge on the FLARE Act, which is meant to incentivize Bitcoin mining with flared natural gas. On the surface, it sounds like a win-win: reduce wasted energy, power the future, and boost American innovation. Before we uncork the champagne, let's ask a critical question: are we so blinded by the shiny object syndrome of crypto that we're ignoring the potential environmental and social fallout?
Innovation From Waste, Or Just Waste?
The FLARE Act, at its core, contains an intriguing answer. We are talking about capturing flared natural gas – a byproduct of oil drilling that's often burned off, polluting the atmosphere. It seems like a brilliant plan to convert all of this waste into energy that runs Bitcoin mining. Cruz claims that it’s environmentally responsible, would reduce emissions and strengthen the electric power grid. Here's the rub: Bitcoin mining is an incredibly energy-intensive process.
Think of it like this: you're trying to solve a leaky faucet by hooking it up to a fire hose. Sure, you’re capturing a little bit of that water that’s already dripping, but you’re making a whole lot larger of a puddle while doing so. There is no doubt the intention behind the FLARE Act is well-intentioned. Are we, without realizing it, rewarding a practice that is fundamentally unstable? Have we fallen prey to the cult of innovation? That could cause us to overlook the enormous amount of energy still consumed and the massive increase in emissions it may cause. The question is, does the reduction in flared gas emissions offset the overall increase in carbon footprint from Bitcoin mining? We have to go on more than rosy projections. We require data that’s transparent and can be independently verified. What happens when that “waste” is actually a comparatively less harmful alternative to the mining operation?
Crypto Utopia, or Social Dystopia?
Aside from these environmental consequences, allow me to briefly lay out the social costs. Like many other pro-crypto Republicans, Cruz frames his pro-crypto stance through the lens of economic freedom and innovation. Who really benefits from this "freedom"? Are we helping everyday Americans, or are we just making tech elites and corporations even richer?
We must start by understanding whether prioritizing crypto innovation helps our most marginalized communities, or just deepens the inequities they already face. The digital divide is an issue that should not be overlooked, as it already affects the marginalized, including low-income individuals and communities of color. With so many crypto promises, if we’re pouring taxpayer resources into crypto infrastructure, aren’t we ignoring bigger priorities such as affordable housing, healthcare, and education? Most importantly, are we really building a system that only the technologically elite and affluent few can access and reap the rewards from?
An objection to this point that I’ve heard is that Bitcoin provides financial inclusion to the unbanked. The crypto markets are even more volatile and complex. This increases the risk of investing in them, particularly for those who are financially illiterate and resource constrained. Are we creating an environment where people are set up to fail because we’re pushing them into a system they know little about?
The American Dream, Powered by Pollution?
Cruz’s robust American leadership in the crypto space, urging that we not let countries like China take the lead. At what cost do we seek this technological dominance—in the name of our planet, and in the name of our people? Is being the world’s crypto leader worth it, if that entails higher emissions, greater social inequality, and a derailed future?
The reality is, the crypto debate is much more nuanced than tired stories of innovation and freedom. It’s much more about weighing potential benefits against actual costs in the real world. And it’s about making sure technological progress is in the service of all members of our society, and not just a privileged few.
Regardless of adoption or regulatory actions, we need sober, clear-eyed conversations about the environmental and social ramifications of crypto. To get there, we must require transparency and protect consumer interests from policymakers and the crypto industry. We must focus on sustainable and more equitable solutions that serve all people, not just profits. Before we fully embrace Cruz's vision of a crypto-powered future, we need to ask ourselves: at what cost? Because sometimes, the cost of progress is just too damn high.
