Crypto carbon: Bitcoin and its (energy-sucking) environmental impact

Thursday, April 22, 2021 by Snacks
_Post-Bitcoin mining sesh energy [RyanJLane/E+ via GettyImages]_

Post-Bitcoin mining sesh energy [RyanJLane/E+ via GettyImages]

Et tu, Bitcoin?... When we hear "carbon emitters," we think of industries that have been around for 100+ years. But there's a new, "sneaky" carbon emitter on the scene: cryptocurrency. While crypto isn't on the same level as agriculture, transportation, and manufacturing, it's not great for the environment. Crypto mining uses tons of electricity... which is mostly generated by burning fossil fuels, like coal and gas.

  • Wild stat: Bitcoin alone accounts for 0.5% of global electricity consumption — more than entire countries like Argentina and Holland.
  • Wild(er) stat: A single Bitcoin transaction generates the same amount of carbon as ~1M Visa transactions — or 78K hours of YouTube binging.

Electricity vacuum... When Bitcoin was created by the mysterious Satoshi Nakamoto, he/she/they wanted to ensure people wouldn't use it fraudulently. Enter "mining"... People mine Bitcoin by using a massive amount of computing power to verify transactions on the blockchain. Special mining computers solve complex equations, making quintillions of attempts per second to verify the legitimacy of transactions (read: major energy suck).

  • While crypto hasn't been a big target of environmental pressure/criticism (yet), a few companies are already working to reduce its footprint.
  • Seetee, a Norwegian investment company, said it planned to invest in cleaner energy (like wind and solar) to power mining operations.
  • Also, there are new ways to conduct greener Bitcoin transactions. Like: “the Lightning Network,” a payment channel that uses less energy.

As Bitcoin grows, so does the energy drain... While retail and corporate investors pour into crypto, the total value of the crypto market has doubled since January to $2T. Companies like PayPal started accepting crypto payments, while others added BTC to their balance sheets. Growing Bitcoin activity could make it hard for certain countries to meet environmental goals. Meanwhile, 95% of millennials are interested in sustainable investing, according to Morgan Stanley. Growing interest in ESG investing could amp up pressure to green-ify crypto.

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