News hardware Crypto: Bitcoin is making a new big enemy…
After the ban on BTC mining in China, Bitcoin has drawn the wrath of another country… The government of this great power recently put forward the idea of banning Bitcoin mining in a logic of energy restriction.
Bitcoin (BTC) deemed polluting by the White House
While Bitcoin was around €40,000, Joe Biden had signed a decree concerning the “responsible” development of the cryptocurrency sector on March 9.
“The rise of digital assets creates an opportunity to strengthen American leadership in the global financial system and at the technology frontier, but also has substantial implications for consumer protection, financial stability, national security and climate risk” . explained the White House with ambition in March 2022.
Well received by market players, they should quickly become disillusioned in view of recent announcements from the White House. Indeed, the discourse has more or less changed: the government already seems categorical about Bitcoin.
The White House recently released a report in which it directly targets bitcoin mining and its “significant” environmental footprint. Authored by the White House Office of Science and Technology, the report floats the idea of banning blockchains from the proof-of-work validation system – used by several cryptos.
Called proof of work in French, this process at the heart of bitcoin allows the operation and security of the network. To do this, the consensus system uses the computing power of miners’ machines (graphics cards, ASICs, etc.) in order to validate transactions between individuals – and thus receive a reward.
For this reason, Bitcoin consumes electricity in abundance. This argument is, among other things, taken up by the government in the first part of the report in order to legislate on Bitcoin:
“If these measures prove ineffective in reducing the effects of mining, the administration should explore executive actions. Congress could consider legislation. A set of laws to limit the use of energy-intensive consensus mechanisms for mining”.
The report finds that there are several ways to make BTC mining part of the pollutant reduction goals in the United States. However, the White House also explains that it could take measures and even go as far as banning mining (PoW), if necessary.
Bitcoin is mostly energy intensive
It is undeniable that the use of electricity necessary for the mining of Bitcoin contributes to the emission of greenhouse gases. However, the argument of ecology holds less and less water. Indeed, more and more mining farms are using renewable energy to earn bitcoin rewards. In a graph published on July 20 by the Bitcoin Mining Council, we observe that Bitcoin would be mined using renewable energy at the rate of 59.5%.
Thus, with several territories in energy deficiencies, the argument of the energy-intensive aspect of Bitcoin seems more appropriate. In this sense, the White House indicates the mining would have an impact on the electrical networks.
The office of science and technology considers that mining adds an energy constraint to the territorial electrical networks. Specifically, the report warns of possible breakdowns and the increase in the cost of electricity “due” to the activities of miners. Consequences that could harm several inhabitants.
Nevertheless, it is interesting to put the energy consumption of Bitcoin in perspective, compared to other sectors.
On this graph published by Bitcoin magazine, we can see that Bitcoin’s electricity consumption is lower compared to the finance, transport, construction and many other industries…
The report is for the moment only research conclusions, therefore the ban on Bitcoin mining in the United States is not yet relevant. Moreover, banning Bitcoin does not seem to be a viable solution, as evidenced by the resumption of mining in China. For this reason, it is important for US lawmakers to find consistent measures that allow bitcoin to operate sustainably.