A new report indicates that proof-of-work (PoW) mining has become the focus of US President Joe Biden and his team. The report was discussed on July 2nd by the OSTP’s principal assistant director. Costa Samaras said that if digital currencies were going to stick around, then it is essential that these systems are developed responsibly and can help reduce total emissions.
Bitcoin mining’s climate impact
According to the director for the energy of the Office of Science and Technology (OSTP) of the White House, a new report will be published in August that will focus on the mining method known as PoW and the impact it has on the environment. Constantine Samaras said that the energy team of the Biden administration is planning on focusing on mining farms that use the crypto consensus models of Proof-of-stake (PoS) and Proof-of-work (PoW).
Samaras said that since these cryptocurrencies are going to be part of the financial system, then they need to be looked into. He said that talking about cryptocurrencies automatically makes it a discussion of energy conservation and climate impact.
Controversial bitcoin mining
There has been a lot of controversy surrounding bitcoin mining because its energy consumption for verifying transactions and securing the blockchain has received a lot of negative attention. But, it is important to note that two studies were conducted recently, which presented a contrarian view. The studies highlighted that Bitcoin mining could actually be good for the environment.
According to one study, the bitcoin network actually uses energy that is 50 times less than that of traditional banking systems. Moreover, another environmental, social, and governance (ESG) report showed that a significant quantity of leaked methane could be eliminated via bitcoin mining and added that there was no other technology that could accomplish the same.
Appropriate policy response
Samaras noted that even though these studies were positive, he had also gone over the negative ones that have been published throughout the year. He said that there had been news of local and noise pollution, as well as the use of generators using fossil fuels. Samaras stated that the energy team is planning on coming up with policies that could work for both PoW and PoS mining.
He said that the White House team needs to focus on what would be an appropriate policy response if the world was to shift to a proof-of-stake algorithm or one that uses a combination of both. Samaras noted that even though proof-of-work uses a lot of energy, it is also a fact that it offers greater security.
The statement from the principal assistant director comes after a crypto executive order (EO) was issued by US President Joe Biden back in March 2022. The order stated that a national policy be developed for regulating digital assets with six priorities. This had to be done back in February, but the Russian invasion of Ukraine had delayed the executive order. In April, Michael McCaul, a Republican senator, said that a robust strategy is needed to ensure that crypto cannot be misused by international enemies.