The United States Will Ban Proof-of-Work (PoW)-Based Crypto, If This Happens

The US has the potential to ban the Proof-of-Work consensus mechanism. (Unsplash)

JAKARTA – In the midst of the hectic news regarding Ethereum's switch from a Proof-of-Work (PoW) consensus mechanism to an environmentally friendly Proof-of-Stake (PoS), problems related to energy consumption began to spread in the US. Recently the White House suggested several specific measures to control the use of high energy in cryptocurrency mining activities.

The White House report states that the Environmental Protection Agency (EPA) and the Department of Energy (DOE) should provide technical assistance on this issue. The overall goal of this standard is to minimize the unintended impact of cryptocurrency mining, he added. Emissions, noise, water impacts, and negative economic impacts from mining crypto assets must be controlled, he explained.

If the US government is unable to take steps to prevent the negative impacts of crypto mining activities, the government may prohibit or limit mining activities. Furthermore, the report from the White House also describes consensus mechanisms that consume high energy in the crypto mining industry such as Proof-of-Work (PoW) mechanisms.

"If these measures prove to be ineffective in mitigating the impact, the Administration should explore executive action, and Congress could consider legislation, to limit or eliminate the use of high-energy-intensity consensus mechanisms for mining crypto assets," according to a report from the White House, quoted from Coingape.

In March 2021 the US government issued an executive order on “Ensuring the Responsible Development of Digital Assets.” The order noted that recent advances in digital and distributed ledger technology have led to dramatic growth in energy demand. The order then emphasizes the need for robust measures to reduce the risk that digital assets can pose to climate change.

Ethereum Merge, Transition from PoW to PoS

Ethereum's transition from PoW to PoS in its Merge phase is the best momentum for various cryptocurrencies that use Proof-of-Stake blockchains such as Cardano, Algorand, Solana, Polygon, and so on. The Merge itself will be implemented this September.

Apparently, the PoS mechanism has caught the attention of the founder of Ethereum, Vitalik Buterin. Buterin has proven this by planning to publish a book entitled Proof of Stake. The book is a collection of Buterin's essays on the development of blockchain in the last 10 years. Proof-of-Stake itself is claimed to be an environmentally friendly consensus mechanism.