The power consumption of Bitcoin (BTC) and other cryptocurrencies is exacerbating climate change, according to a new White House report.
The report follows an executive order issued by President Joe Biden to address growing concerns about the environmental impact of cryptocurrencies as the industry has grown in popularity.
Left unchecked, the report warns, the energy consumed by cryptocurrencies could hamper the nation’s environmental goals of reducing carbon emissions.
“The power consumption from digital assets contributes to this [greenhouse gas emissions]additional pollution, noise and other local impacts depending on markets, policies and local power sources.”
The White House Office of Science and Technology Policy (OSTP), the report’s author, says crypto assets consume between 120 and 240 billion kilowatt hours per hour, or 0.4% to 0.9% of the world’s total annual electricity consumption. In the United States, crypto assets consume up to 1.7% of US electricity consumption and overall about a third of global cryptocurrency operations.
According to the report, the future energy needs of the industry are unpredictable, but there is a need to establish standards for operation.
One recommendation is to initiate discussions between stakeholders, including the Environmental Protection Agency (EPA), Department of Energy (DOE), state governments and crypto leaders, to collaborate on developing standards for a cleaner future.
“These should include standards for very low energy intensities, low water use, low noise, clean energy use by operators, and standards that are strengthened over time for additional carbon-free generation to meet or exceed the additional electricity load of these assets.”
The report emphasizes the importance of ensuring the reliability of power grids in communities where crypto operations could increase and suggests some requirements.
“To help US climate goals, industries could be voluntarily or required to build zero-carbon energy capacity that produces more electricity than the crypto-asset mine needs and sell excess clean energy back to the grid.”
The report states that the US has a target of reducing greenhouse gas emissions by 50%, which is 52% below 2005 levels by 2030 and achieve a clean power grid by 2035.
Last year, tech titans Jack Dorsey and Elon Musk challenged conventional wisdom about Bitcoin’s energy consumption.
Musk agreed that BTC does in fact incentivize renewable energy after Dorsey cited a report by Square Crypto, now known as Spiral.
“Sun and wind produce cheaper energy than fossil fuels. That should make them ubiquitous, but they’re held back by an obvious flaw: they produce too much energy when demand is low and not enough when demand is high. Batteries could help here, but are not economical enough on their own.
What can solve this problem is an ecosystem where sun/wind, batteries and bitcoin mining coexist to form a green grid powered almost entirely by renewable energy. This is not only doable, it can be done without jeopardizing the viability of the sector.”
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