The amount of electricity used by Bitcoin (BTC) and other cryptocurrencies exacerbates climate change, according to a new report from the White House.
The report stems from an executive order issued by President Joe Biden to address rising concerns about the environmental impacts of cryptocurrencies as the industry’s popularity grows.
Left unchecked, the report warns, the energy used by cryptocurrencies could hinder the nation’s environmental goals to reduce carbon emissions.
“Electricity usage from digital assets is contributing to [greenhouse gas emissions], additional pollution, noise, and other local impacts, depending on markets, policies, and local electricity sources.”
The White House Office of Science and Technology Policy (OSTP), the author of the report, says crypto assets are using between 120 and 240 billion kilowatt-hours per hour, or 0.4% to 0.9% of the total annual electricity use in the world. In the United States, crypto assets consume up to 1.7% of US electricity usage and a total of about one-third of the world’s cryptocurrency operations.
The report says the future energy demands of the industry are unpredictable but there is a need to create standards for operations.
One recommendation is to initiate discussions among involved parties including the Environmental Protection Agency (EPA), the Department of Energy (DOE), state governments and crypto leaders to collaborate on developing standards for a cleaner future.
“These should include standards for very low energy intensities, low water usage, low noise generation, clean energy usage by operators, and standards that strengthen over time for additional carbon-free generation to match or exceed the additional electricity load of these facilities.”
The report stresses the importance of ensuring the reliability of electrical grids in communities where crypto operations may grow, and it suggests some requirements.
“To help US climate objectives, industries could volunteer or be required to build zero-carbon energy capacity that produces more electricity than the crypto-asset mine requires, selling excess clean energy back to the grid.”
The report says the US has a goal to reduce greenhouse gas emissions by 50%, which is 52% below 2005 levels, by 2030, and to achieve a clean energy electricity grid by 2035.
Last year, tech titans Jack Dorsey and Elon Musk challenged conventional wisdom on Bitcoin’s use of energy.
Musk agreed that BTC actually incentivizes renewable energy after Dorsey quoted a report from Square Crypto, which is now known as Spiral.
“Solar and wind produce cheaper energy than fossil fuels. This should make them ubiquitous, but they’re held back by an obvious flaw: they produce too much energy when demand is low and not enough when it’s high. Batteries could fix this, but alone aren’t economical enough.
What can fix this problem is an ecosystem where solar/wind, batteries, and bitcoin mining co-exist to form a green grid that runs almost exclusively on renewable energy. Not only is this doable, it is doable without jeopardizing the sector’s profitability.”
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Source: https://dailyhodl.com/2022/09/08/white-house-report-questions-energy-use-of-bitcoin-and-crypto-assets/