Bitcoin mining in the United States could be banned according to a recent document released by the White House. Regulators and lawmakers could analyse whether to ban Bitcoin mining activities or not in the future if they continue to be energy intensive. This, instead, does not happen to cryptocurrencies that operate with a Proof-of-Stake (PoS) consensus algorithm and that do not require mining activities to protect the security of the network.
Could Bitcoin Mining be Banned?
Bitcoin mining could be banned if this represents a risk to the environment due to its carbon footprint. The White House released a report called Climate and Energy Implications of Crypto-Assets in the United States in which they discuss how different consensus algorithms work and which is their impact on the environment.
One of the things mentioned in the report is that to ensure the “responsible development” of digital currencies, is that the Environmental Protection Agency (EPA), and the Department of Energy (DOE), alongside other agencies, should work with the crypto industry to develop effective environmental standards for the use of crypto-asset technologies.
Furthermore, some of the things that the agencies take into consideration include low energy intensity, low water usage, low noise generation, clean energy usage by operators, carbon-free generation, and many other things. Therefore, government agencies want to make sure that they reduce the impact of mining activities on the environment.
Nevertheless, the report keeps on explaining that if these measures prove to be ineffective, there could be new regulations that limit or ban the use of miners.
On that matter, the report reads as follows:
“Should these measures prove ineffective at reducing impact, the Administration should explore executive actions, and Congress might consider legislation, to limit or eliminate the use of high energy intensity consensus mechanisms for crypto-asset mining.”
How Could Proof-of-Work Help the Grid?
Despite the negative overview of the population related to Proof-of-Work and Bitcoin mining activities, there are some things to take into consideration.
Proof-of-Work Aims at Reducing Energy Costs
Bitcoin miners are searching for different ways to reduce their energy costs. One of the best ways to do so is not by purchasing grid electricity, but to invest in renewable energy sources that would be cheap and would give them an advantage over other miners.
Therefore, with large investments in renewable and cheap energy, Bitcoin miners could reach an agreement with grid network operators in order to increase the available energy.
Enhancing the Grid
As mentioned before, Bitcoin mining operators could offer grid operators to sell cheap energy during peak times in order to keep the grid running without interruptions. Once the peak passes, miners could get connected once again in order to make use of the excess energy produced by mining operators.
Therefore, Bitcoin miners could help stabilize the grid when there is a peak in energy consumption, and, at the same time, can connect their miners as soon as the peak ceases and there is an excess of energy to use.
Finally, renewable energy providers such as hydro electrical power plants or wind generators could store the excess energy by mining Bitcoin. This could also have a very positive impact on the energy markets, especially in places with large renewable energy sources.