White House Could Consider Banning all Proof-of-Work Cryptocurrencies Including Bitcoin
On Thursday, September 8, the White House Office of Science and Technology released a report drawing attention to the negative impacts of Bitcoin mining on the environment and hinting towards a ban of Bitcoin.
The Proof-of-Work consensus model involves miners that use high-end equipment to add each block to the blockchain. These equipment consumes of large amounts of electricity which has been the area of major concern for the regulators.
The U.S. and many other western countries have been facing unprecedented heat waves with parts of California and Texas announcing partial blackouts. This has resulted into growing concerns of shortage in electricity supply amid soaring demands. As Bitcoin miners join the electricity grids, it further drives energy costs higher.
In its report, the White House Office of Science and Technology writes: “Electricity usage from digital assets is contributing to [greenhouse gas emissions], additional pollution, noise, and other local impacts, depending on markets, policies, and local electricity sources".
They further hinted towards banning Bitcoin and other PoW cryptocurrencies if the regulatory actions fail to influence U.S. climate goals. The report added: “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 document also explores how crypto mining can affect the electrical grids. The report notes that Bitcoin mining facilities have created added stress on the power grids leading to fire hazards, blackouts, and equipment deterioration. Thus, there’s every chance that Bitcoin mining activity can raise the electricity costs even for the 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,” reads the report.
Interestingly, the report comes just at a time when Etheruem blockchain is undergoing a transition to a Proof-of-Stake consensus model next week with the Merge event. During his interview with journalist Noah Smith last week, Ethereum co-founder Vitalik Buterin also expressed his concerns with the Proof-of-Work model. He said: “A consensus system that needlessly costs huge amounts of electricity is not just bad for the environment, it also requires issuing hundreds of thousands of BTC or ETH every year”.