The process of mining that is, making and verifying transactions in bitcoins (BTC), ether (ETH) and other decentralized digital assets. However, such activity consumes a lot of energy and hits an already uncertain electricity sector. These are related to extreme weather conditions, the aging of electrical cables, the transition to renewable energy, or even the electrification of transport.
The state of mining in USA
an mining cryptocurrency requires large amounts of energy and the demand for electricity in the cryptocurrency industry has increased 20 times in the last five years.
Mines, or mining farms, can consist of thousands of servers stacked in warehouses. They use raw computing power to solve a series of complex mathematical problems. As a result, this consumes more electricity each year than many countries, including Pakistan and Finland, according to the Cambridge Bitcoin Electricity Consumption Index.
The index estimates that its total annual consumption is approximately equal to all lights and televisions in the United States combined.
The study, published last year, found that the mining in the New York area there is an increase in monthly electricity bills. So those bills went up by about $ 8 for households and $ 12 for small businesses. According to the study, the increase in local tax revenue linked to the development of mining offset less than 15% of the increase in costs for the inhabitants.
Miners have gone to regions with cheap energy and colder weather to run their servers. Therefore, it would be relevant to establish a database that reflects location, energy consumption and local influences, according to Matteo Benetton, professor of finance at the University of California.
Supervision of the mining at the heart of the project to fight climate change
The US government provides a regulatory arsenal to oversee the mining of bitcoin to limit the climate impact of the sector. This regulation should enter into force in August.
According to Bloomberg’s Law, the political commitments of such reforms shall apply in particular to the lack of public interest in such action. In fact, the US administration is developing policy proposals aimed at reducing energy consumption and the footprint of cryptocurrency issues. This initiative reflects the desire to take over an understandable industry and weigh it on the electricity grid.
” It is important, if this is to be part of our financial system in any meaningful way, that it be developed responsibly and reduced to overall emissions. Costa Samaras, senior deputy director for energy at the White House Office of Science and Technology Policy, told Bloomberg Law.
In March 2022, US President Joe Biden had already signed an executive order calling for the responsible development of digital assets to be promoted. The involvement of the White House in the mining Bitcoin is part of a global effort to fight climate change.
Adapting Bitcoin (BTC) to the US financial system
According to Costa Samaras, such regulation is also motivated by the expansion of the cryptocurrency field and the exponential demand for their integration within the financial system. It also adds that this regulation is necessary for the responsible development of the market and for the minimization of overall emissions.
Downstream, the government will examine a number of factors. For example, the noise pollution caused by mining, the Proof-of-Work (PoW), and the Proof of Bet (PoS) is used by other cryptocurrencies and is 99% more energy efficient. The idea is to examine the benefit / risk balance, that is, the benefits of crypto assets for the social body.
Such a policy proposal depends on the inability of the Environmental Protection Agency (EPA) to address the impact of the cost of energy on the environment. mining. In fact, it does not control energy use by particular consumers or industries, which led some members of the Democratic camp to raise their voices last April.
In May 2022, Energy Web unveiled a rating system that would shed light on how bitcoin miners can reduce their emissions.
The growth of mining activity in the United States is seen as an additional source of degradation of the country’s energy ecosystem, as the country faces numerous difficulties including infrastructure affected by weather conditions.
During 2022, Ethereum plans to move from Proof-of-Work to Proof of Bet. Despite some politicians asking him to follow Bitcoin, he has no plans to do so. Moreover, some of them think that such a change could distort the foundation of the Bitcoin project.
Establish a business register
A number of activists and institutions have called on the White House to create a register of mining companies that use the Proof-of-Work.
The Ministry of Energy could publish an efficiency standard that would encourage miners to abandon this method. The comments filed by Greenpeace, the Environment Working Group and Earthjustice seem to point in this direction.
The EPA may impose stringent reviews on the operations of Conradh na Gaeilge mining Kind of Proof-of-Work. The objective is to achieve net zero greenhouse gas emissions in the electricity sector. The timeline is set for 2035 and 2050 for the entire US economy.
After the ban on mining in China, other countries may follow this trend. If the Americans seem to want to take a less extreme position, the regulation of activity on the new continent seems more timely than ever.
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Regarding the anarchy of the intermediaries of the current monetary system, I oppose DeFi, digital assets and the metaverse. Lawyer in Luxembourg, I am interested in cryptocurrency investment funds.