Over the past year, bitcoin and altcoins have come under heavy criticism for their potential negative impacts on the environment. Strong critics of cryptographic technology accuse it of requiring too much energy to operate and producing CO2. It was against this backdrop that a Harvard Kennedy School professor named Bruce Schneier spoke on January 4. Here is what Bruce Schneier proposes to limit the damage of cryptocurrencies to the environment.
A tax to force cryptocurrency users to reduce their carbon footprint
While some argue that cryptos improve the energy transition, others see them as an environmental hazard. In a blog posts Posted on January 4, Bruce Schneier talked about a solution to decarbonise cryptocurrencies. He suggested that the authorities could go through taxation to achieve this. Indeed, the Harvard Kennedy School lecturer proposes to do somake investors pay for any damages environmental.
Bruce Schneier is therefore campaigning to impose a new tax on crypto transactions. He stated: “To encourage polluting currencies to reduce their carbon footprint, we need to force buyers to pay for their environmental damages through taxation“. “As with taxes on gasoline, tobacco, plastics and alcohol, a tax on cryptocurrencies could reduce real-world harm by charging consumers“, He added.
Not all cryptocurrencies are dangerous for the environment!
Bruce Schneier pointed out that some cryptocurrencies have a higher carbon footprint than others. He points out that there are still digital assets with nearly zero emissions. He spoke in particular of Ethereum of which energy consumption has decreased by more than 99.9% since the Merger.
But, according to Schneier, bitcoin and other cryptocurrencies will not agree to do like Ethereum by switching from Proof-of-Work (PoW) to Proof-of-Stake (PoS). They should be forced to do it first,”because PoW offers huge profits to miners“.
Harvard Kennedy School fellow Bruce Schneier has proposed a method for efficient taxation of cryptocurrencies. The collection of the tax should be doneas a fixed percentage on every Proof-of-Work cryptocurrency purchase“. According to Schneier, the other means of taxationwould be ineffective, as they are easy to circumvent and difficult to apply“. This is stated by the speaker exchanges they have to collect taxes like merchants before returning the money to governments.
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Far from dampening my enthusiasm, a failed investment in a cryptocurrency in 2017 only increased my enthusiasm. I therefore decided to study and understand the blockchain and its multiple uses and to convey information related to this ecosystem with my pen.