The Desire to Control U.S. Bitcoin Mining is Increasing

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  • A report last week called for the government to ban Bitcoin mining if its environmental impact can’t be controlled
  • The report was a response to the executive order handed down in March
  • This action included involvement from government departments in the mining process

The recommendation for Bitcoin mining to be banned in the U.S. has spread, with a report last week recommending that congress “eliminate” the use of energy-intensive consensus mechanisms like proof-of-work be considered if other measures fail to reduce carbon emissions from mining activities. The report was a response to President Biden’s executive order on cryptocurrencies earlier this year, which called for an multi-department reporting process that would allow the White House to get a full picture of the scope of the crypto landscape. A ban is stated as the last resort, but the fact it is mentioned at all is another sign of the anti-Bitcoin sentiment springing up in the U.S. and abroad.

Government Should be Involved in Bitcoin Mining, Says Report

The report, entitled Climate and Energy Implications of Crypto-assets in the United States, looks at the ways in which proof-of-work activities are having a negative impact on the environment compared to what is produced as a result. The report concluded that “Crypto-assets could hinder broader efforts to achieve net-zero carbon pollution consistent with U.S. climate commitments and goals”, and suggested that an unlikely collaborative effort be instituted:

The Environmental Protection Agency (EPA), the Department of Energy (DOE), and other federal agencies should provide technical assistance and initiate a collaborative process with states, communities, the crypto-asset industry, and others to develop effective, evidence-based environmental performance standards for the responsible design, development, and use of environmentally responsible crypto-asset technologies.

The report added that 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 has a warning for Bitcoin mining operations if these partnerships don’t deliver:

Should these measures prove ineffective at reducing impacts, the Administration should explore executive actions, and Congress might consider legislation, to limit or eliminate the use of high energy intensity consensus mechanisms for crypto-asset mining.

Anti-Bitcoin Mining Sentiment Spreading Worldwide

The report signs off by saying that Bitcoin could move to a proof-of-stake consensus mechanism as Ethereum has done, but this has raised all sorts of objections by Bitcoin supporters on practical, technological and ideological grounds.

It follows a law passed in New York State in June this year that banned any new Bitcoin mining plants from opening up and disallowed existing firms from any expansion, while government agencies looked into the environmental impact of the activity. Europe, too, has been keen to crack down on Bitcoin mining, with the EU parliament narrowly being defeated on a motion to stop the sale of cryptocurrencies derived from proof-of-work in the EU.

This of course follows China’s banning of Bitcoin mining in May last year, although this was more for political than ideological reasons.