Banning bitcoin mining would be a move that would strike a blow at the core of the digital asset system and would restrict or eliminate the proof-of-work process that underlies Bitcoin and its blockchain network. The White House has raised the notion of reducing or removing this mechanism.
What Exactly Is Bitcoin Mining?
Bitcoin mining is the process of verifying the legitimacy of transactions and adding them in the right format to the Bitcoin blockchain via the use of a worldwide network of computers that are running the Bitcoin code. Mining is the method by which new Bitcoins are generated, and it is also the name of the activity. The validation of new transactions against the Bitcoin network is an essential step in the mining process of bitcoin, which ultimately leads to the generation of brand-new bitcoins.
Mining is the technique by which Bitcoin transactions are digitally confirmed on the Bitcoin network and added to the blockchain ledger. Mining is also the name of cryptocurrency itself. To validate blocks of transactions that are updated on the decentralized blockchain ledger, it is necessary to solve complicated cryptographic hash puzzles. This is done to accomplish this task.
The bitcoin mining ban
In a study that was released on Friday, the White House Office of Science and Technology Policy urged that greenhouse gas emissions and other environmental problems that are a direct result of “mining” for cryptocurrencies should be regulated. The group advocated for standards that tighten over time and require low energy intensities, low water usage, low noise generation, clear energy usage by operators, and standards over carbon-free generation to meet or exceed electricity load. These standards should be implemented to match or exceed current demand.
The White House issued a statement that included the following recommendation: “Should these efforts prove insufficient at minimizing effects, the Administration should pursue administrative actions, and Congress should consider legislation, to prohibit or ban the use of high energy intensity consensus processes for crypto-asset mining,” the statement said.
The Bitcoin network is protected by a method known as proof-of-work, which validates transactions on the blockchain and ensures the integrity of the cryptocurrency. Proof-of-work is dependent on crypto “miners,” who are people who use computers to solve difficult riddles and burn a significant amount of energy in the process.
The announcement did not have much of an immediate effect on the price of bitcoin. A favorable change in investor attitude toward cryptocurrencies and other risk-sensitive assets has contributed to a 10% increase in the price of the most valuable digital asset over the last twenty-four hours. The announcement had no immediate impact on the crypto mining industry, as seen by the fact that shares of Marathon Digital and Riot Blockchain (RIOT) increased by 10% and 9% in premarket trading in the United States, respectively.
The White House has gone as far as to suggest that energy-intensive cryptocurrency mining, namely Bitcoin mining, may be outlawed entirely if efforts to make mining more environmentally friendly are unsuccessful. They claimed that politicians and authorities in the United States might soon tighten down on the mining of cryptocurrencies due to the industry’s significant carbon impact.
A recent report by the White House Office of Science and Technology Policy, which was mandated by President Biden in an executive order in March, stated that cryptocurrency miners should reduce their emissions of greenhouse gases with assistance from the Environmental Protection Agency (EPA), the Department of Energy (DOE), and other federal agencies.