On Thursday, the White House in Washington released a document that has it all. A fact sheet on “Climate and Energy Implications of Crypto Assets in the United States States” aims to point out how the high energy consumption in crypto networks, and of course Bitcoin in particular, must be handled in the future in the USA. And between the lines you read: If there are no drastic improvements, then the US government is also willing to to work with prohibition.
The broadcast on the future handling of crypto-assets regarding energy consumption comes shortly after the US government under Joe Biden pushed through the huge Inflation Reduction Act. $369 billion was launched for the largest climate protection package in history to force the switch to electric cars, renewable energy and the like. So it doesn’t fit the picture that the US is the main place for Bitcoin mining.
“Depending on the energy intensity of the technology and the power sources used, the rapid growth of cryptoassets could hamper overall efforts to achieve the US climate goals of net-zero pollution,” the White House said. As the location of many Bitcoin miners and crypto businesses in general, the United States sees itself as particularly burdened.
“The US is home to an estimated one-third of the world’s cryptoassets, which currently account for about 0.9% to 1.7% of total US electricity consumption,” it said. This electricity consumption, in turn, produces 25 to 50 million tons of CO2/year, equivalent to 0.4% to 0.8% of total US greenhouse gas emissions. “This range of emissions is comparable to emissions from diesel fuel used in rail transportation in the United States,” it said.
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“Effective Environmental Standards for Crypto”
And now we must react. The White House is now calling for “effective, evidence-based environmental performance standards for the responsible design, development, and use of green crypto technologies.” “These should include standards for very low energy intensity, low water consumption, low noise production, clean energy consumption by operators and standards that provide additional carbon-free production over time equal to or equal to the additional electricity load of these installations that exceed it,” it says. There is no deadline for this yet.
But the White House is cracking down on the crypto industry, particularly bitcoin miners. And threatens: “Should these mitigations prove ineffective, the government should consider executive action and Congress could consider legislation to limit or stop the use of high-energy-intensity consensus mechanisms for mining cryptoassets.”
Two crypto assets are explicitly mentioned in the document: Bitcoin and Ethereum. Starting next week, Ethereum’s energy problem will be solved because the network will then switch to Proof of Stake, which is expected to reduce energy consumption by 99 percent. Meanwhile, there is no sign that bitcoin will see cuts in energy demand.
According to the industry association Bitcoin Mining Council (BMC), 60% of Bitcoin mining now runs on renewable energy. However, the figures come from surveys of members, which include many mining companies. The White House wants independent agencies to collect data on it in the future. This is how the Energy Information Administration and other federal agencies should collect and analyze information from cryptoasset miners and electric utilities.
Bitcoin mining is said to run on 60% renewable energy