The White House Office of Science and Technology Policy (OSTP) has ruled on the environmental and energy impact of crypto assets in the United States, concluding that cryptocurrencies contribute significantly to energy use and greenhouse gas emissions. (GHG). It recommends supervision and regulation as a response.
The report, released on September 8, is the latest result of US President Joe Biden’s March executive order (EO) on the development of digital assets. The EO commissioned the OSTP to investigate the energy use associated with digital assets, comparing that use to other energy expenditures, investigating the uses of blockchain technology to support climate protection, and making recommendations to minimize or mitigate the environmental impact of digital assets.
The study found that crypto assets use approximately 50 billion kilowatt-hours of energy per year in the United States, accounting for 38% of the global total. The lack of control made it impossible to accurately account for energy. However, the report kept up the tradition of making creative comparisons of energy use, saying that crypto assets are responsible for slightly more energy use in the US than home computers, but less than home lighting or cooling. Also:
“Noting that direct comparisons are complicated, Visa, MasterCard and American Express combined […] they consumed less than 1% of the electricity Bitcoin and Ethereum used that same year, despite processing many times the number of on-chain transactions and supporting their broader corporate operations.”
High energy use wears down grids and drives up energy prices, according to the report. The role of Proof of Work in the energy consumption of crypto assets was clearly pointed out, as well as the fact that changes in the use of consensus mechanisms and the rapid evolution of the field make it impossible to foresee the future use of crypto assets as well. energy.
In any case, the report said that “crypto asset mining using grid electricity creates greenhouse gas emissions, unless the mining uses clean energy.” The report also featured use cases for Blockchain technology to distribute energy and support environmental (carbon) markets. The report examined some strategies to improve the energy use of crypto assets, such as the use of stranded methane, but others, like reuse of waste heat from cryptocurrency mining, they were not considered.
Just in from the White House OSTP – “Crypto-asset mining that installs equipment to use vented methane to generate electricity for operations is more likely to help rather than hinder US climate objectives.” @thetrocro @jyn_urso @DSBatten
— David Zell (@DavidZell_) September 8, 2022
Fresh from the White House OSTP – “Cryptocurrency mining that installs equipment to use vented methane to generate electricity for operations is more likely to help than hinder America’s climate goals.”
The report’s recommendations were broadly worded, for example:
“Federal agencies should provide technical assistance and initiate a collaborative process with states, communities, the cryptocurrency industry, and others to develop effective, evidence-based environmental performance standards.”
Other recommendations include evaluating and enforcing energy reliability in light of crypto mining projects, setting energy efficiency standards, and research and monitoring.
The OSTP report is one of five being released this week. The Justice Department released a report in June on international law enforcement enhancements envisioned in the EO, and the Treasury Department reported in July on a framework for international engagement.
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