Bitcoin (BTC) has too high a carbon cost, according to a White House report. As a result, it recommends encouraging miners to use greener energy sources… Or face a possible ban.
A report on the ecological cost of cryptocurrencies
President Joe Biden had asked for a report on cryptocurrencies, with a view to regulating them more widely. It was the White House Office of Science and Technology Policy that looked into the subject, and it has just published a report.
The report focuses on the ecological costs of cryptocurrencies, and proof of work in particular. The report points out that the Bitcoin and Ethereum (ETH) networks together account for 60% of cryptocurrency capitalization. In total, the mining of this type of crypto-currencies would represent 0.3% of greenhouse gas emissions.
Hence, recommendations from the report: the cryptocurrency sector should reduce its impact, and players should be encouraged to use more “green” consensus methods.
White House considers ban on Bitcoin mining
The report makes several suggestions for action, including better oversight of cryptocurrency miners, to “mitigate the impacts” of their activity. With possible real-world consequences: the White House report considers an outright ban on mining if its ecological consequences are not reduced:
“If these measures were not effective in reducing impacts, the Administration should explore executive orders, and Congress could consider legislation, to limit or eliminate the use of these electricity-intensive consensus mechanisms for cryptocurrency mining.”
This is just a recommendation from a report so far, but it’s far from trivial. Since China closed its mining farms, miners have moved… Notably to the United States, which accounted for 38% of the world’s hashrate last January, according to data gathered by CBECI.
The United States has thus become a hub for global mining, and it intends to regulate this sector. Things are also changing in cryptocurrencies. In a few days, Ethereum will switch to proof of stake, which will drastically reduce its electricity consumption. A major event, which could encourage institutions and decision makers to look again at the subject.
