White House produced 46-page research on “Climate and Energy Implications of Crypto-Assets” It examines blockchains’ energy usage, carbon emissions, and stress on local energy supplies, an increasing issue given the energy crisis.
It’s one of nine papers in the White House’s “Comprehensive Framework for Responsible Development of Digital Assets” The report’s recommendations may affect cryptocurrencies in the U.S. for a decade. The Comprehensive Framework report recognized energy consumption and environmental impacts as part of the “Advancing Responsible Innovation” priority pillar.
CFTC chair eyes disclosures to curb energy consumption in Bitcoin mining . Commodity Futures Buying and selling Fee chair Rostin Benham is seeking to analysis and incentives to deal with vitality utilization in bitcoin mining,
— Jinnie (@jiangtu0916) September 18, 2022
The fact sheet says the suggestions might become legislation whether the Bitcoin community likes them.
Climate and Energy study criticized Proof-of-work (PoW). Proof-of-stake (PoS) was suggested as a possible solution to several of PoW’s problems. The analysis advocated an energy-efficient PoS future for cryptocurrencies.
Recommendations by the government for reducing energy consumption
A Climate and Energy Institute study says blockchains must reduce their carbon footprint and energy use. By August 2022, Bitcoin is expected to account for 60% to 77% of global crypto-asset electricity use.
the most bullish bitcoin miners I know believe that bitcoin energy consumption will be less than 5% of global energy consumption in fifty years
the white house mining report is a non story based on bullshit assumptions, there is a lesson in there somewhere pic.twitter.com/8Cqyo4wtJ2
— ODELL (@ODELL) September 8, 2022
Most concerns about blockchain energy usage focus on carbon emissions; however, the Comprehensive Framework study also highlights raw energy use. Bitcoin’s tremendous energy usage can’t be compensated by green sources alone, particularly as the world confronts a new energy crisis.
The study suggests that government organizations, including the EPA and other significant entities, engage with business stakeholders to design climate-conscious blockchains. The study isn’t hostile to crypto assets or blockchains but concerned about their environmental impact.
Did you notice that the White House report compares PoW and PoS with respect to security and decentralization? It says that #PoW and PoS are equal on these parameters. The fundamental difference is in energy consumption, where #PoS performs significantly better.#Cardano #Bitcoin pic.twitter.com/2g3RUnTRGS
— Cardano YODA (@JaromirTesar) September 12, 2022
According to blockchain legal expert Michael Bacina, PoW will grow more difficult for institutional adoption, affecting pricing. Government inspections of energy efficiency and societal concerns are driving the adoption of PoW blockchains over time. However, increasing energy instability and pricing will not fix this problem.
Joe Lubin said similar things about Ethereum’s PoW days. According to Lubin, “big financial institutions” are waiting until Ethereum migrates to PoS before getting involved.