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Ethereum’s Merger has raised questions about Bitcoin’s Energy Consumption

As Bitcoin and Ethereum See Bearish Push, Lunc May Rally Again

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.

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.

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.

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.

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