Jack Dorsey Educates Congress on Proof of Work
Founder of Block (formerly Square) Jack Dorsey spoke to the Democrats of the House Financial Services Committee on March 31st, 2022 in order to address some of their concerns about Bitcoin and cryptocurrencies.
Topics that attendees brought up with Dorsey include:
- Energy consumption - Dorsey covered the various ways that Proof-of-Work cryptocurrencies, particularly Bitcoin, are able to repurpose stranded or wasted energy. Gas flaring and hydropower are examples where Bitcoin mining is able to consume the excess energy that is produced from these energy sources. Renewables are also the most cost effective ways for Bitcoin to be mined. Miners will continue to seek renewable or wasted energy as they expand operations because they are incentivized to save as much money as possible.
- Money laundering - A discussion was held about the transparent nature of a distributed ledger that everyone around the world can download and view. Dorsey explained that Bitcoin and cryptocurrencies would not be an appropriate way to launder or hide funds since all transactions can be seen by the public.
- Use as a payment method - Attendees and Dorsey also discussed how Bitcoin and cryptocurrencies do not require an intermediary in order to facilitate transactions. If an individual has access to their private keys, they are able to perform peer-to-peer transactions with other participants who also hold their private keys. Second layer infrastructure like the Lightning Network for Bitcoin are able to provide very cost effective and near instant payments for global users. Lightning also has the ability to mitigate transactions on the base layer where Proof-of-Work is required to verify transactions.
The members in attendance also wanted to learn more about Block’s involvement and why it was solely focusing on Bitcoin. Dorsey went on to explain that Block is not trying to replace Visa or Mastercard but wants to offer the world an open environment. Block is striving to “bank the unbanked” while offering services and opportunities that many would not be able to participate in otherwise.