Crypto trading has taken the back seat in the digital economy in 2022, with the market remaining under the bears' control for most of the year. Furthermore, traders have seen their faith rocked by the consecutive failures of centralized exchanges. These intermediary marketplaces have been the powerhouse of the industry since its humble beginnings. Now, they seem to crumble under mounting allegations of scams, lawsuits, and solvency concerns. Meanwhile, they make a convincing case for the imminent decentralization of crypto…
President Biden and his administration are working on policy solutions for minimizing the environmental effects of Bitcoin mining. As more hash power migrates to the U.S, critics have begun claiming that it could threaten US climate goals.
The Proof-of-Stake Question
As reported by BloombergTax on Thursday, the new report is expected in August and will push federal agencies towards ensuring more “responsible” mining. However, it’s unclear if those recommendations will lead to effective policy action.
Costa Samaras, principal assistant director for energy for the White House Office of Science and Technology Policy, offered his thoughts:
“It’s important if this is going to be part of our financial system in any meaningful way, that it’s developed responsibly and minimizes total emissions,” he said. “When we think about digital assets, it has to be a climate and energy conversation.”
On the topic of mining, framing is everything. Critics often claim that much less energy-intensive payment solutions exist, such as VISA or Proof-of-Stake (POS) networks. However, as the Bitcoin Mining Council argued last month, Bitcoin’s energy is required for creating decentralized consensus for a secure monetary system.
Samaras revealed that the study will dig into all claims surrounding cryptocurrency’s potential societal benefit, down to its fiercest criticism. It will examine air/ noise pollution concerns about the technology and the viability of POS systems.
Bitcoiners claim that POS technology contains single points of failure, despite officials’ promotion of it as an alternative. Generally, the community is less likely to agree to a code change than Ethereum. The latter has a POS upgrade coming up in August. Nevertheless, Ripple’s co-founder has put millions of dollars towards a public campaign advocating for just that.
Bitcoin’s Sustainability Mix
A POS transition isn’t the only answer to energy concerns, however. Energy Web – a tech company focusing on decarbonization – has developed a scoring system enabling miners to demonstrate their effort in fueling lower emissions.
“I think the most bang for their buck is going to be on education and disclosure of bitcoin mining,” said CEO Jesse Morris on the matter.
Estimates from the Bitcoin Mining Council show that the mining industry already has a 58.4% sustainable energy mix. Investing superstar Kevin O Leary has also surmised that mining could “save the world” by incentivizing the production of renewable power generation facilities.