To print this article, simply register or log in to Mondaq.com.
On September 8, the White House released a report (“Climate-Crypto Report”) on the climate and energy implications of cryptocurrencies in the United States, followed by a detailed fact sheet summarizing the report’s findings. The Climate-Crypto Report was prepared following President Biden’s Executive Order 1407 of March 9, 2022 which required an examination of the impact of distributed ledger (“DLT”) technologies on energy transactions and ultimately on energy transactions. environment.
The Climate-Crypto Report addressed four questions: (1)
how Do digital assets affect energy use and grid management? (2) what is the scale climate, energy and environmental impacts of digital assets? (3) what are the potential uses of DLTs that could support climate monitoring? and (4)
what critical political decisionsdo we need innovation and research to mitigate the environmental impact of digital assets?
The report acknowledges that while President Biden’s administration has defined the policy for responsible development of U.S. digital asset markets, it also acknowledged the rising costs on U.S. energy infrastructure and the impact on the environment, considering that mitigation is also of climate change is one of President Biden’s key priority actions.
First, the Climate-Crypto Report notes that cryptocurrencies use a significant amount of electricity, globally equal to the amount of electricity used by Argentina or Australia. It also found that not all cryptocurrency technologies consume the same amount of energy, with Proof of Work (“PoW”) mechanisms far exceeding the energy usage of Proof of Stake (“PoS”) processes.
Second, the Climate-Crypto Report found a considerable impact on the environment of anthropogenic greenhouse gas (“GHG”) emissions associated with cryptocurrency markets. In addition to the increased demand on the power grid, the generation of cryptocurrencies also generates noise pollution, impact on water and many other environmental waste.
Third, the report also notes that there are wide and varied uses of DLT in environmental markets, better coordination of resources, and supply chain management.
Finally, the Climate-Crypto Report recommends the reduction of associated greenhouse gas emissions, the reduction of energy-intensive technologies (such as PoW) in favor of more low-impact PoS processes and efforts to avoid negative impacts on underserved communities. and overloads. In fact, on September 6, Ethereum did just that: it launched The Merge to move to the lower power consumption PoS process.
During the recent Senate hearing on September 15 to review the recently proposed Digital Commodities Consumer Protection Act, several panel members acknowledged the carbon footprint of cryptocurrency markets. These findings are further addressed in a Sept. 16 statement from the White House proposing a comprehensive framework for responsible digital asset development in the United States.
The content of this article is intended to provide general guidance on the subject. A specialist’s opinion on the specific circumstances should be sought.
POPULAR ARTICLES ABOUT: Technology from the United States