•The U.S. Senate Committee on Banking, Housing & Urban Affairs received inaccurate testimony on Bitcoin from actor Ben McKenzie and Professor Hillary J. Allen.
•The hearing had the markings of political theater and was used to misinform senators and the public.
•Mr. McKenzie lacked the qualifications and expertise to provide accurate testimony on the inner workings of financial technology.
On December 14, the U.S. Senate Committee on Banking, Housing & Urban Affairs was treated to an inaccurate testimony on Bitcoin from actor Ben McKenzie and Professor Hillary J. Allen. The hearing was entitled “Crypto Crash: Why the FTX Bubble Burst and Harm to Consumers,” and it coincided with Elizabeth Warren’s new financial surveillance bill, which is a disaster for privacy and civil liberties. The hearing had all the markings of political theater and was used to misinform senators and the public. Senator Sherrod Brown, the Chair of the Senate Banking Committee, even divulged on “Meet The Press” that the hearing was intended to “educate the public” on the dangers of cryptocurrencies and floated the idea of banning them altogether.
However, the testimony provided by Mr. McKenzie was far from accurate. Mr. McKenzie is best known for his roles in popular television shows such as “The O.C.,” “Gotham” and “Southland,” and it should come as no surprise that he made basic errors in his testimony. His lack of expertise on the inner workings of financial technology was painfully obvious, and the Senate Banking Committee should have called witnesses with actual expertise instead.
According to Mr. McKenzie, “Bitcoin cannot work as a medium of exchange because it cannot scale. The Bitcoin network can only process 5 to 7 transactions a second. By comparison, Visa can handle tens of thousands. To facilitate that relatively trivial amount of transactions, Bitcoin uses an enormous amount of energy. In 2021, Bitcoin consumed 134 TWh in total, comparable to the electrical energy consumed by the country of Argentina. Bitcoin simply cannot ever work at scale as a medium of exchange.”
Unfortunately, Mr. McKenzie’s statements were riddled with inaccuracies. It is true that the Bitcoin network can only process a few transactions per second, but this is due to the design of the network and the consensus mechanism that it uses to verify transactions. Bitcoin is designed to be a secure, decentralized digital asset and its transactions are secured by a network of computers around the world. The network also allows for more transactions to be processed as it grows, making it more efficient over time. Additionally, Bitcoin’s energy consumption is not comparable to the energy consumption of a whole country, as Mr. McKenzie suggested. In fact, it is estimated that Bitcoin’s energy consumption is only 0.44% of the global energy consumption.
Overall, the testimony provided by Mr. McKenzie at the Senate Banking Committee hearing was inaccurate and should not be taken seriously. The Senate Banking Committee should have called witnesses with actual expertise on financial technology, rather than relying on the testimony of an actor with no relevant experience. It is important that the public is educated on the true potential of Bitcoin and other cryptocurrencies, rather than being misled by inaccurate information.