America is home to about a third of global cryptoasset operations — meaning 0.9% to 1.7% of total U.S. electricity usage has been linked to mining.
The U.S. should consider "eliminating" Bitcoin mining unless steps can be taken to make it more environmentally friendly, according to a White House report.
The 46-page document delves into the climate and energy implications of cryptocurrencies — and begins by setting out why action is needed.
Authors warn climate change causes heatwaves, wildfires, extreme weather events, damage to infrastructure and damage to crops — leading to deaths and disproportionately affecting undeserved communities. What's more, estimates suggest that climate disasters cost the U.S. a whopping $145 billion in 2021 alone.
Figures in the report suggest that the global electricity usage for cryptocurrencies stands at 0.4% to 0.9%.
But America is home to about a third of global cryptoasset operations — meaning 0.9% to 1.7% of total U.S. electricity usage has been linked to mining.
"This range of electricity usage is similar to all home computers or all residential lighting in the United States. Cryptoasset mining is also highly mobile. The U.S. share of global mining from Bitcoin, the largest cryptoasset, rose from 3.5% in 2020 to 38% today, with U.S. electricity usage for cryptoasset mining, while still relatively small, tripling since January 2021."
The report says aggressive policies are needed to ensure the crypto industry is cleaner, and the U.S. meets its climate objectives.
It suggests that the Environmental Protection Agency and the Department of Energy should lead discussions and reach an agreement with the crypto industry, adding:
"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. 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 cryptoasset mining."
Ethereum's imminent move to a Proof-of-Stake blockchain could help this blockchain reduce its energy usage by up to 99.95% — and if it's a success, Bitcoin's consumption could attract even more scrutiny.