Each year, individual countries are pressured to ramp up their emissions reduction promises at the annual UN Climate Change Conference (COP). With Bitcoin mining being blamed for using as much power as an entire country, the cryptocurrency industry finds itself on a collision course with these global net-zero emission commitments. As governments search for easy targets to strike, the number one cryptocurrency faces potential price decline and increased regulatory difficulties in the years ahead.
In recent times, there have been several warning signs. A report from the European Commission in late 2022 revealed that EU countries “must be ready to block cryptocurrency mining.” Moreover, the Biden administration has proposed a 30% excise tax on the power consumption of U.S. cryptocurrency mining operations, including renewable energy sources. These moves signify a heightened awareness of cryptocurrency mining’s adverse environmental impacts, which could lead to stricter regulations and restrictions.
However, some experts argue that instead of trying to ban an “unbannable technology,” governments should focus on greening their grids, which miners rely upon. They suggest that the threat from net-zero commitments should be viewed as an opportunity to harness technological innovation and employ renewable energy, transforming the environment into a greener and more inclusive landscape.
Critics often point out the huge energy consumption associated with Bitcoin mining. However, Bitcoin enthusiasts argue that the network uses less power than the traditional banking system and that a majority of the power used by the industry is renewable. They further claim that mining can incentivize renewable electricity generation by utilizing excess or stranded energy, thus mitigating the environmental impact.
At the same time, experts say the cryptocurrency industry must take the renewable energy agenda forward and proactively embrace new sustainable technologies. While there is progress in this direction, such as Bitcoin Mining Council’s self-reported 58.9% sustainable energy mix, there is still much to be done, especially with surging demand for cryptocurrencies.
For regulators and lawmakers attempting to comply with their international climate change commitments, there may be difficult decisions in store. Even a mining industry powered 100% by renewable energy could find itself in the crosshairs, as that emissions-free energy could be used to help more politically valuable industries meet their emission targets.
In conclusion, while Bitcoin faces mounting pressure due to its energy consumption, the net-zero emission commitments present the cryptocurrency industry with opportunities for growth and innovation. Embracing renewable energy sources and driving towards more sustainable practices could put the sector on a more trusted and secure footing in the years to come. Nevertheless, whether this change will come from within the industry or via external intervention remains an open question that urgently needs to be addressed.
Source: Cointelegraph
