The White House has expressed concern that the production of cryptocurrencies such as Bitcoin (BTC) may have a negative effect on the environment, which might thwart efforts by the United States to tackle climate change.
The finding places the Biden administration squarely in the middle of an already heated debate over the carbon footprint of digital assets. For months, critics have been raising concerns about the amount of power utilized in cryptocurrency mining operations.
Interestingly, although the White House Office of Science and Technology Policy did not propose particular rules, the report issued on Thursday, September 8, noted that the US must take measures to reduce emissions associated with cryptocurrency manufacturing.
According to the agency, the federal government should gather more data on electricity use and collaborate with states and the crypto sector to establish guidelines.
“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 stated.
According to the research, crypto operations in the United States currently consume almost the same amount of energy as household PCs do.
Biden’s executive order
In March, President Joe Biden issued a comprehensive executive order regarding cryptocurrencies, which included the commissioning of the investigation. It is anticipated that in the following weeks, additional federal departments and offices will make recommendations and studies about how the United States government should approach the asset class.
The findings presented on September 8 are consistent with the Biden administration’s emphasis on climate change mitigation. Since early 2021, American government agencies have begun a variety of global warming-related initiatives.
Interestingly, the author of the personal finance book ‘Rich Dad, Poor Dad’ Robert Kiyosaki is concerned Biden will usher in a scenario akin to the world in Orwell’s book ‘1984’, as the order was discussed as ‘spyware’ on The Rich Dad podcast.
Crypto mining process
To create new currencies and validate transactions on the Bitcoin and Ethereum (ETH) blockchains, numerous computers compete to solve challenging arithmetic problems, with the winner adding new verified transactions to the blockchain in return for token rewards.
This month, the Ethereum network will undergo a significant software update known as the Merge, which will transfer the blockchain to a less energy-intensive methodology
Meanwhile, the study states that air, noise, and water pollution from crypto mining activities may harm the environment and “exacerbate environmental justice issues for underserved communities.” At the same time, increasing electrical consumption from such processes may place further pressure on already strained power systems.
On the other hand, a recent study revealed that Bitcoin is projected to become first monetary system to hit net zero emissions by 2024 despite receiving criticism regarding its carbon footprint impact.
Nevertheless, as stated by the White House, the new guidelines produced by federal agencies in collaboration with states and the crypto sector might mitigate the proposed damage. These might include initiatives to limit noise pollution and encourage the use of sustainable energy.