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White House Report Recommends Banning Bitcoin Mining to Slash GHG Emissions

White House Report Recommends Banning Bitcoin Mining to Slash GHG Emissions

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The White House Office of Science and Technology Policy (OSTP) has released a report examining the connection of distributed ledger technologies (DLT) to climate change.

The office stated that crypto’s relationship with the environment is mixed. While acknowledging the positive impact mining can have on grid stability and the development of renewable energy, it can also exacerbate “environmental justice issues” due to greenhouse gas emissions and other factors.

As such, the agency suggested that the administration may need to consider banning the use of proof of employment as a consensus mechanism.

Crypto: an environmental threat?

The report — titled “Climate and Energy Implications of Crypto Assets in the United States” — is a response to President Biden’s March crypto control order. The president directed more than 20 administrators and agency heads to submit research reports and recommendations on various crypto topics to promote responsible regulation of the industry.

“Crypto assets may hinder broader efforts to achieve net zero carbon emissions consistent with US climate commitments and goals,” OSTP said in the report.

In particular, it noted that blockchains that use a proof of work (POW) consensus mechanism – particularly Bitcoin – use “significant amounts” of electricity and increase air, water and noise pollution in some areas. Bitcoin and other large POW networks together account for 0.3% of global annual greenhouse gas emissions.

As such, the report suggests that federal government action is needed to ensure widespread adoption and responsible development of digital assets. One recommendation is that federal agencies work with states and the crypto industry to develop environmental protection standards for the use and development of crypto-asset technologies.

These standards would target low energy use, low water consumption, low noise production and the use of clean energy by miners. However, if these methods prove ineffective, OSTP suggested executive or congressional action.

“Congress may consider legislation to limit or eliminate the use of high-energy-intensity consensus mechanisms for mining cryptocurrencies.” it read.

Is Proof as a contribution the answer?

CFTC Chairman Rostin Benham has previously proposed creating incentives to move the Bitcoin network to a Proof of Stake (POS) consensus mechanism. In March, Ripple co-founder Chris Larsen funded a $5 million campaign to power the transition.

However, Bitcoiners have a long time were against such a change, arguing that POW is needed to maintain a sufficiently decentralized network.

However, Ethereum disagrees. The network is set to make a similar change next weekwhich is expected to reduce the energy consumption of the network by 99.5%.

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