White house

White House Urges Congress to Ban Proof-of-Work Mining

Biden canceling Bitcoin

The White House has released a report concerning the impact of proof-of-work crypto mining on the environment. It ultimately concluded that mining should be banned or restricted by Congress, saying:

"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"

Most of the report consists of the Biden administration citing the environmental concerns of governmental officials regarding mining. It mentioned explicitly that cryptocurrency mining may hinder the US's goal of being a net-zero nation.

A one-sided argument 

Throughout the "fact-sheet," cryptocurrencies are referred to as crypto-assets. Since the legality of cryptocurrencies is still a question on Capitol Hill, government officials have adopted the term to better describe them as investments. It was clear from the start of the report that Bitcoin was the ultimate target they were discussing. POW altcoins like Ethereum Classic and Monero also use a considerable amount of electricity to reach consensus, but they aren't as much of a concern to the government, due to their hash rate being dwarfed by Bitcoin. The report noted:

"As of August 2022, Bitcoin is estimated to account for 60% to 77% of total global crypto-asset electricity usage, and Ethereum is estimated to account for 20% to 39%."

The report is largely bearish on the cryptocurrency industry, as it fails to see the value in using secure money without banks. What the White House doesn't understand is that the energy consumption of Bitcoin is a feature rather than a bug to ensure network security.

There was also talk within the report of how cryptocurrency mining can hinder the agenda of social justice warriors:

"Local noise and water impacts, electronic waste, air and other pollution can exacerbate environmental justice issues for neighboring communities, which are often already burdened with other pollutants, heat, traffic, or noise."

What the Biden Administration wants

The Biden administration prefers a highly restricted and regulated market, where you can seldom use or earn crypto. What you can see from the so-called factsheet, is that the Biden administration thinks Bitcoin will significantly hurt their efforts at curbing climate change.

Given it would be unprecedented for Congress to restricted proof of work mining like this, the goal of their report is to push proof-of-stake. But, in proof-of-stake, consensus is reached via stakeholders vs computation power. The national loss in innovation caused by a move like banning crypto mining would be significant. After all, it would affect hybrid projects like Zilliqa and Decred too.

It's important to discuss this topic with lawmakers, as restriction of a censorship resistant technology is a dangerous precedent to follow.

Cryptohopper