The White House has released a report on the climatological impact of Blockchain technology. It then drew the ire of Bitcoin and altcoin enthusiasts. The topic of the report recommending banning Proof-of-Work (PoW) consensus mechanisms has been widely circulated. However, when the report is really looked at, it is seen that there is no such prohibition. Here are the details…
Is the White House banning PoW altcoin projects?
Does the White House want to ban proof-of-work mining? Despite what many crypto enthusiasts say, it doesn’t seem like it. The White House Office of Science and Technology Policy has released a report that will guide policymakers in considering the environmental costs and benefits of blockchain technology. The report, titled “Climate and Energy Impacts of CryptoAssets in the United States,” is the first of a series of interagency policy reports commissioned by President Biden in March.
The report has created quite a stir in the hours since its publication. While the report was widely and competently researched, it was widely condemned by the crypto community. Reactions on social media have been fast and furious, with critics focusing on one paragraph in the 46-page document. The paragraph in question is as follows:
The Environmental Protection Agency (EPA), 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 development. Comply with environmental performance standards for responsible design, development and use of environmentally sound crypto-asset technologies. These should include standards for very low energy densities, low water use, low noise generation, clean energy use by operators, and time-strengthened standards for additional carbon-neutral generation to meet or exceed the additional electrical load of these facilities. If these measures prove ineffective in mitigating the impacts, the Administration should investigate executive actions and Congress may consider legislation to limit or eliminate the use of high energy density consensus mechanisms for cryptoasset mining.
The crypto community on Twitter draws attention to the importance of valuation
The crypto community on Twitter has revealed numerous screenshots of this part of the text. Usually the bolded text above is highlighted to emphasize the importance of the situation. The consensus among crypto believers was that this meant the Biden Administration actively wanted to ban proof-of-work crypto mining, with many jumping straight to the most paranoid conclusions. “This isn’t about climate change, it’s about total and absolute control,” tweeted Dylan LeClair of Bitcoin Magazine.
However, it is thought that the issue is definitely related to climate change. Far from making a policy recommendation to ban Proof-of-Work mining, the report points out that any ban would be a last resort, such as advances in ASIC technology, the transition to greener energy sources, and even the creation of Blockchain specifically for environmental monitoring and mitigation. The full effect is noted in the report as an alternative to banning Proof-of-Work consensus mechanisms.
Crypto fans are picturing the report from the White House as an attack on the industry. For some, however, this paragraph does not take into account its original purpose, which is made clear to all. It is noted that the article presents a cost-benefit analysis that weighs the benefits of Blockchain. In fact, according to another quote, the government is happy to experiment with cryptocurrencies. But their job is to make sure they add more value than they extract.
The environmental impact of PoW mining is ignored
For many in the field, the environmental impact of PoW mining is simply overlooked as FUD. Still, it’s no secret that the energy consumption of PoW Blockchains is high. Finally, it’s important to keep in mind that the climate report is not a poor quality study, and there are hardly any US federal agencies that did not play a role in its creation. However, the Treasury is expected to release its own report on crypto assets in the coming days as the President’s contribution to the overall government plan. This will no doubt shed more light on how US officials think about the complex cryptocurrency space.
Finally, you can see a list of Bitcoin and altcoin projects operating with the PoW consensus algorithm as follows:
