White House Suggests Banning Proof-Of-Work Crypto
Nicholas Otieno Sep 09, 2022 04:55
The Biden administration believes that crypto asset mining consumes a lot of electricity. The White House researchers are urging crypto miners to explore greener alternatives.
The White House Office of Science and Technology released a report on Thursday urging the Environmental Protection Agency (EPA) and the Department of Energy (DOE) to take measurable actions to control high energy consumption by crypto mining proof-of-work mechanism.
The report is among the first responses to US President Joe Biden’s executive order on cryptocurrencies.
The document acknowledges that cryptocurrency technologies use a high amount of electricity that contributes to greenhouse gas emissions, additional pollution, noise and other local impacts.
The first section of the report, which serves as an introduction, hints toward banning proof-of-work cryptocurrency mining operations if regulatory action fails to enable the country to achieve its climate goals.
“Should these measures prove ineffective at reducing impacts, the Administration should explore executive actions, and Congress might consider legislation, to limit or eliminate the use of high energy intensity consensus mechanisms for crypto-asset mining,” the report said.
The next part of the document explores the impact of crypto mining on national electrical grids. The White House’s Science and Technology team claims that Bitcoin mining, powered by a proof-of-work consensus mechanism, adds stress on the power grid that results in cases of blackouts, fire hazards, and equipment deterioration. According to the report, Bitcoin mining has raised the average electricity cost for local consumers.
“Depending on the energy intensity of the technology used, crypto-assets could hinder broader efforts to achieve net-zero carbon pollution consistent with U.S. climate commitments and goals,” the report elaborated.
The final section of the report suggested ways in which Bitcoin mining can benefit efforts toward achieving U.S. climate goals. The report advocated for the responsible development of digital assets and solutions to drastically reduce crypto energy consumption.
The report recommended the use of the “less energy-intensive consensus mechanism, called Proof of Stake (PoS), which is considered to consume less than 0.001% of global electricity usage.
The White House also encouraged crypto miners to consider using electricity generated from vented and flared methane at oil and gas wells and landfills as another viable alternative.
Why Is the White House Taking an Interest?
In March, U.S. President Biden signed an executive order, calling on the government to examine the risks and benefits of crypto assets.
The measures focused on six key areas like consumer protection, financial inclusion, financial stability, U.S. competitiveness, illicit activity, and responsible innovation.
The executive order was a kind of a ‘call to action’ that laid out a series of policy statements, such as the need to protect consumers, investors, and businesses in the US, as well as the need to support technological advances that promote responsible development and use of digital assets.
The executive order expected a set of reports coordinated through the interagency process from a broad range of executive branch stakeholders.
Image source: Shutterstock