‘Restrict or Eliminate’ — Biden Executive Order Triggers Shock Proposal for US Bitcoin Ban After Radical Ethereum Upgrade and Wild Cryptocurrency Swings
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Following an order issued by US President Joe Biden in March in the wake of an extraordinary rise in the price of bitcoin in 2021, the Office of Science and Technology said the government “has a responsibility” to “protect” people from pollution caused by cryptocurrencies.
The proposal comes amid a shake-up in the crypto market caused by ethereum, the second largest cryptocurrency after bitcoin, which is beginning its long-awaited transition from proof-of-work to the far more energy-efficient proof-of-stake – which some believe could trigger a massive bitcoin- price crash.
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US President Joe Biden issued an executive order earlier this year directing government agencies … [+]
“Electricity use from digital assets contributes to [greenhouse gas emissions]additional pollution, noise, and other local impacts, depending on markets, policies, and local electricity sources,” the report said, adding, “The U.S. government has a responsibility to ensure grid stability, enable a clean energy future, and protect society from pollution and climate change.”
The climate impact of bitcoin mining has become a hot topic in recent months as the skyrocketing bitcoin price pushed up bitcoin’s energy needs and climate change fears reached a fever pitch.
The Bitcoin price surged in late 2020 and into 2021 only to crash back this year – although it remains around double its mid-2020 level.
The Bitcoin network is thought to use about as much energy each year as some smaller countries, and the Cambridge Center for Alternative Finance recently calculated that it uses around 110 terawatt hours per year, or 0.55% of global electricity production, equivalent to the annual energy needs of such as Malaysia and Sweden.
The Office of Science and Technology recommends creating so-called clean energy “performance standards” for bitcoin and cryptocurrency mining — which involves the use of powerful computers to both secure the blockchain network and create new coins — including encouraging the “use of environmentally responsible crypto-asset technologies. “
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The Bitcoin price is currently trading just under $20,000 per bitcoin, well below the all-time high … [+]
“Should these measures prove to be ineffective in mitigating the impacts, will [Biden] the administration should explore executive action, and Congress may consider legislation, to limit or eliminate the use of high-energy-intensive consensus mechanisms for mining cryptoassets” – referring to bitcoin’s proof-of-work.
Earlier this year, internal EU documents revealed Swedish financial regulators and the EU’s European Commission discussed the possibility of banning bitcoin’s proof-of-work mining mechanism due to its environmental impact.
Meanwhile, ethereum, which still uses the proof-of-work system developed by bitcoin, has begun a long-awaited transition to proof-of-stake, removing reliance on miners while reducing the ethereum network’s carbon footprint by 99%.
Ethereum is expected to complete the transition to proof-of-work around mid-September.
