By Jessica Bahia Melo
Investing.com – Energy consumption for cryptocurrency mining is the target of criticism regarding the sustainability of this process. Countries are implementing new initiatives and regulations to limit overconsumption. In Argentina, for example, some of the largest mining companies have seen their energy bills increase by 400%. The New York State Senate in the United States has passed a bill suspending cryptocurrency mining operations that use carbon-based energy.
The negative impact of cryptocurrencies on the environment is exaggerated, due to the importance given to . That’s what Julius Baer said in a statement Thursday morning, pointing out that other consensus mechanisms, such as proof-of-stake, “consume much less energy and are much more in the line of sight of developers of decentralized applications (dApps) because of their greater scalability. We see them as the primary beneficiaries of decentralized finance (DeFi),” says Next Generation Research Analyst Sipho Arntzen.
While critics point to high power consumption as an inefficient use of resources, mining companies believe the security and decentralized features justify the change. Now, even if the project in NY is subject to final approval, “it shows how the environmental footprint of digital assets remains in the spotlight of regulators and investors”, reinforces the analyst,
According to Julius Baer, the United States holds the largest share of the global bitcoin hash rate – showing that the largest number of miners are in the country. Therefore, regulatory actions taken in one state may have broader effects and set a precedent for other bans.
“Due to the decentralized nature of blockchain technology, cryptocurrency mining can take place anywhere, with the primary factor in deciding location being the prevailing regulatory environment and electricity costs. as one of the major cost of entry. This bill could cause several cryptocurrency miners to leave the state in droves for more cryptocurrency-friendly states or countries, which could discourage the use of blockchain technology in the state,” he detailed.