In the time since a 2022 report by the White House warned of cryptocurrency's energy costs and negative impacts on the climate and environment, the industry has grown significantly.
What's happening?
In March of that year, President Joe Biden issued an executive order to ensure the responsible development of digital assets, as Investopedia reported. The response six months later from the White House Office of Science and Technology Policy indicated changes must be made to avoid the production of heat-trapping pollution, prevent electricity costs from rising, and stabilize power grids.
The OSTP said the United States could have trouble meeting its climate action goals if the crypto industry doesn't reduce its use of dirty fuel-based energy, which harms humans, wildlife, and the environment and strains the grid. It also pointed out crypto mining only widens the equity gap and creates problems for communities.
In January and February 2024, the Energy Information Administration started collecting energy use data from mining operations under an emergency order, but the companies, backed by the Texas Blockchain Council, filed a successful suit to slow down the process, according to Investopedia.
Why is this important?
The concern raised by the White House report (among others) is that cryptocurrency industry growth generally means that more and more power is needed.
It's concerning for a number of reasons, not the least of which is the noise pollution produced by miners. In Texas, a crypto stronghold, residents of Granbury have said they are unable to sleep or enjoy their properties and have suffered permanent hearing loss and severe cases of vertigo because of a mining facility.
Then there's the impact on the planet.
One bitcoin transaction, for example, requires 2,237 gallons of water, Investopedia reported. The day before it published its story, there were approximately 552,000 Bitcoin blockchain transactions alone, meaning the platform used well over 1.2 billion gallons of water.
The footprint of the industry amounted to more than 150 million tons of pollution per year (as of the 2022 report) as well as tens of thousands of pounds of e-waste (as of 2024), per Investopedia.
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What's being done about cryptocurrency mining?
Crypto companies could cut use or switch to using renewable energy, and much of the controversy would vanish. Ethereum also cut its energy consumption by 99.95% by moving from proof-of-work mining to proof-of-stake and is more usable than other cryptocurrencies, according to Investopedia, but proof-of-stake's "massive initial investment" requirement means validators must already be wealthy to get in the game.
There's also concern about the industry's reaction to the government's information search, as it sure made it seem like crypto mining was sucking up even more resources than estimated. And the crypto-friendly incoming presidential administration could bury or dismiss any adverse findings from forthcoming EIA reports.
"Because of the urgency of actions needed to address human contributions to climate change, there needs to be immediate transparency regarding cryptocurrency mining operations," Investopedia stated. "As has always been the case, the greed of the few is winning the battle against actions taken to protect the masses and the environment."
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