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In a report on the environmental and energy effects of crypto assets in the United States, the White House Office of Science and Technology Policy (OSTP) concluded that the use of cryptocurrency significantly increases energy consumption and greenhouse gas (GHG) emissions. In response, it suggests monitoring and regulation.
The study, which was made public on September 8, was the most recent to result from US President Joe Biden's executive order (EO) on the creation of digital assets, which was issued in March. According to the EO, the OSTP was tasked with examining the energy consumption of digital assets, contrasting it with other energy expenditures, looking into how blockchain technology can be used to support climate protection, and offering suggestions on how to reduce or mitigate the environmental impact of digital assets.
According to the survey, the annual energy consumption of crypto assets in the United States is around 50 billion kilowatt-hours, or 38% of the total worldwide. Accurate energy accounting was rendered impossible by a lack of monitoring. However, the research continued the habit of making inventive comparisons between energy usage, noting that crypto assets use less energy than home lighting and refrigeration in the United States but significantly more than personal computers do. Furthermore:
Despite processing several times as many on-chain transactions and sustaining their larger corporate operations, Visa, MasterCard, and American Express collectively used less than 1% of the electricity that Bitcoin and Ethereum did in the same year.
High energy consumption degrades grids and raises energy costs, according to the analysis. It was observed that proof-of-work (PoW) staking plays a significant part in the energy consumption of cryptographic assets and that it is impossible to predict future energy consumption due to changes in consensus method usage and the field's rapid expansion.
The research also proposed blockchain technology use cases for energy distribution and supporting environmental (carbon) markets, stating that "Crypto-asset mining utilizing grid electricity causes greenhouse gas emissions – unless mining employs clean energy." Some methods for reducing the energy consumption of crypto assets were included in the paper, such as the use of stranded methane, but others, such as recycling collateral heat from crypto mining, were not.
Just in from the White House OSTP - “Crypto-asset mining that installs equipment to use vented methane to generate electricity for operations is more likely to help rather than hinder U.S. climate objectives.” @thetrocro @jyn_urso @DSBatten
— David Zell (@DavidZell_) September 8, 2022
The report's suggestions were expressed in general terms, for instance:
Federal agencies should start a collaborative approach with states, local governments, the crypto-asset business, and others to produce efficient, fact-based environmental performance criteria while also offering technical help.
The assessment and enforcement of energy reliability in light of cryptocurrency mining operations, the establishment of energy efficiency requirements, and research and monitoring were some other recommendations.
One of five reports due the same week is the OSTP report. In accordance with the EO, the Justice Department published a report on improving global law enforcement in June, and the Treasury Department reported on a framework for global involvement in July.
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