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June 2, 2022

White House Developing Policy to Reduce Bitcoin Energy Consumption

Bloomberg Law reported on Thursday that the White House is working on policy recommendations to limit Bitcoin energy consumption and carbon footprint in the United States.

Following a series of complaints from critics that Bitcoin’s high energy consumption for mining operations endangers the country’s environmental goals and strains its national grid, the government has taken this action.

The White House’s Chief Energy Policy Advisor, Costa Samaras, stated that if digital assets are to be a part of the financial ecosystem, it must be climate and energy neutral.

If this is to play a significant role in their financial system, it is crucial that it is developed responsibly and total emissions are minimized. When considering digital assets, they must consider climate and energy conservation, said Samaras.

The Bitcoin energy use policy is anticipated to be published in August, but it is unclear whether the law will be passed immediately.

Mining refers to the process of using powerful computers to solve complex computational puzzles in order to create blocks on the blockchain.

Bitcoin, for example, employs a Proof-of-Work (PoW) consensus algorithm that necessitates a high amount of energy to verify and process transactions.

Some global regulators have expressed concern over decentralized assets such as Bitcoin and Ethereum, whose transactions require a great deal of processing power.

China, for instance, has outlawed crypto mining after launching a massive crackdown in Q4 2021 against all crypto mining facilities in the region.

Similarly, in March, the Conversation Committee of the New York State Assembly passed a bill prohibiting Bitcoin mining operations in the region for two years. Nevertheless, the law is still awaiting approval from the Assembly and Senate. It must also be approved by the governor of the state.

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Greenpeace was reported to have launched an anti-Bitcoin and anti-environmental effects campaign in the same month.

The “Change The Code, Not The Climate” campaign received $5 million in funding from the chairman of Ripple, Chris Larsen.

The EU parliament also passed a proposal to restrict the use of Proof-of-Work (PoW) crypto assets, but the bill was defeated by a vote of 34 to 24.