A report from the White House Office of Science and Technology Policy on cryptocurrencies sounds the alarm about the impact of Bitcoin mining on the environment. The document, written at the request of U.S. President Joe Biden, proposes a ban on Bitcoin mining and Proof of Work (PoW).
Bitcoin, its Proof of Work (PoW) worries the White House
The White House Office of Science and Technology Policy has released a report on cryptocurrencies. The latter was made at the request of U.S. President Joe Biden whose intention is obviously to have an informed opinion on the crypto sector before putting on the table a possible regulation.
In the said document, particular attention is paid to the security mechanisms of blockchains. These include Proof of Work, a method that requires the allocation of colossal computing power to validate transactions, as well as Proof of Stake, which requires only a lock-in of capital on a smart contract to secure a blockchain.
While Proof of Stake consumes only a tiny amount of energy, Proof of Work, especially used to mine bitcoin, is very energy intensive. For the White House, this process is incompatible with the objectives of the American government, which wants to position itself as a model in the fight against global warming.
Thus, the Biden administration believes that due to the carbon footprint of cryptocurrency mining, estimated at 0.3% of global CO2 emissions, that it is necessary for cryptocurrencies to use greener methods of security. The White House also wants to push miners already established in the U.S. to use non-carbon energy, or face heavy penalties.
BTC miners in the crosshairs of the US government
The office of science and technology policy of the house has made some recommendations to minimize the ecological consequences of mining. These include the use of vented methane to generate electricity. This method would be best suited to meet U.S. climate goals.
Reducing the environmental impact of bitcoin mining is not just a concern for the Biden administration. For several months, many miners and energy producers have been considering mining bitcoin to absorb excess energy.
The report submitted to Joe Biden proposes an outright ban on mining if the measures do not produce good results.
“If these measures are not effective in reducing (ed. note: ecological) impacts, the Administration should explore executive orders, and Congress may consider legislation, to limit or eliminate the use of these electricity-consuming consensus mechanisms for cryptocurrency mining.”
The environmental impact of cryptocurrency mining is of increasing concern to more and more stakeholders. After the ban on the activity in China, the global mining map has completely rearranged itself. At the time of writing, a significant portion of bitcoin mining, 30% according to CBECI (Cambridge Bitcoin Electricity Consumption Index), is located in the US.
With the Office of Science and Technology Policy’s proposal, the noose is tightening on bitcoin miners. If the US Congress approves it, many “less green” miners could be forced to leave the US. Where will they go then? No one knows, but one thing is for sure, it won’t be in Paraguay!
Since 2017 I am fascinated by bitcoin that I no longer hesitate to popularize by organizing meetups/conferences or by sharing its news through this article you are reading.