The White House says the environmental impact of producing cryptocurrencies like bitcoin could hinder US efforts to combat climate change.
The conclusion puts the Biden administration at the center of an already raging debate over the carbon footprint of digital assets. Critics have been ringing alarm bells for months regarding the amount of electricity used in crypto mining operations.
While the White House Office of Science and Technology Policy has stopped short of setting specific rules, the report released on Thursday said the US should take action to reduce pollution associated with crypto production. The office said the federal government should collect more data on electricity use and work with states and the crypto industry to set standards.
“Depending on the energy intensity of the technology used, crypto assets could hinder broader efforts to achieve net-zero carbon pollution in line with US climate commitments and goals,” the White House office said. Crypto operations in the US now use almost as much energy as home computers do, according to the report.
President Joe Biden ordered the study in March as part of a broader executive order on cryptocurrencies. In the coming weeks, other federal agencies and offices are expected to issue recommendations and reports on how the US should deal with the asset class.
The findings released on Thursday coincide with the Biden administration’s focus on mitigating climate change. Beginning in 2021, US government agencies have launched a series of efforts related to global warming.
Creating new coins and validating transactions on the Bitcoin and Ethereum blockchains involves an energy intensive process in which multiple computers compete to solve complex math puzzles, adding new verified transactions to the blockchain in exchange for winning token rewards.
software upgrade
The Ethereum network is set to undergo a major software upgrade this month, known as a merge, that will transition the blockchain to a less energy-intensive approach. Bitcoin and Ether are the first and second largest coins in the world, respectively.
The US now mines 38% of the world’s bitcoins, compared to 3.5% in 2020, according to data cited Thursday by the White House. Meanwhile, blockchains that support crypto assets now use more energy than many countries, including Argentina and Australia. to report.
The document states that air, noise and water pollution from crypto mining operations can harm the environment and “raise environmental justice issues for underserved communities.” At the same time, the increased demand for electricity from those operations could put additional strain on already stressed electricity. grid
development of standards
The White House said new standards developed by states and federal agencies working with the crypto industry could lessen the impact. These may include measures to reduce noise generation and promote the use of clean energy.
Under Biden’s March executive order, agencies and offices across the government are to send several reports to the president this month. Thursday’s report was the first to be released publicly.
This story has been published without modification in text from a wire agency feed.
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