TThe White House warns that the U.S. could be hindered by cryptocurrency production like Bitcoin.
Biden’s conclusion places the administration at the centre of the already heated discussion about the digital assets’ carbon footprint. Since months critics have been raising alarm about the electricity consumed by crypto mining operations.
Although the White House Office of Science and Technology Policy did not issue any regulations on Thursday, it said that the U.S. should take steps to reduce pollution from crypto production. According to the office, the federal government needs more information on energy usage. It should also work with the states and crypto industry in order to establish standards.
“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 White House office said. According to the report, crypto operations in the U.S. consume about the same amount of energy as homes computers.
As part of an executive order that impacted all cryptocurrencies, President Joe Biden directed the study to be completed in March. Other federal offices and agencies are expected to issue reports and recommendations on how the U.S. should handle the asset class in the coming weeks.
The conclusions released on Thursday dovetail with the Biden administration’s focus on mitigating climate change. A series of initiatives related to global warming have been launched by American agencies since the beginning of 2021.
In order to generate new Bitcoin or Ethereum coins, and to validate transactions therein, it is a very energy-intensive process. Multiple computers are competing to solve difficult math puzzles. Winners add verified transactions to blockchains in return for token rewards.
Continue reading: Fact-Checking 8 Claims About Crypto’s Climate Impact
Software upgrades
Merge is a software upgrade that will transform the Ethereum network to be more energy-efficient. Bitcoin and Ether are the world’s first- and second-biggest tokens, respectively.
According to statistics cited Thursday by the White House, the U.S. now does 38% of the world’s Bitcoin mining, compared with 3.5% in 2020. According to the report, crypto asset-supporting blockchains use more energy now than most countries including Australia and Argentina.
Air, noise, and water pollution from crypto mining operations can hurt the environment and “exacerbate environmental justice issues for underserved communities,” the document says. The increased electricity demand can also put added strain on already stressed power lines.
Standards development
According to the White House, new standards that federal agencies have developed in collaboration with the states and crypto industry might reduce their impact. These standards could include noise reduction and clean energy use.
Under Biden’s March executive order, agencies and offices across the government are supposed to send the president a series of reports this month. Thursday’s report was the first one to be released publicly.
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