The words “cryptocurrency” and “carbon footprint” are on many minds right now, but seldom uttered in the same sentence. But with the fact that powering a single BTC transaction takes over 2,264 Kilowatt-hours (kWh) worth of electricity, enough to boil 1,500 kettles, and a growing number of investors placing a value on companies that emphasize environmental principles, businesses in this space that are serious about long term growth may need to ask themselves if they can go green.
How Is Cryptocurrency Contributing to Climate Change?
The process of Bitcoin mining involves hundreds of thousands of computers guessing at the blockchain. Because the combination of computers consuming energy and cryptocurrencies like Bitcoin is thought to consume 707 kWh per transaction, this means crypto alone is making a significant contribution to the world’s carbon footprint. Bitcoin mining consumes 121.36 terawatt-hours a year, which, to put it in perspective, is more than the consumption of Google, Apple, Facebook, and Microsoft combined.
Can Crypto Become More Sustainable?
Many crypto developers and advocates are making efforts towards sustainability. For example, Mawson is aspiring to be one of the leading infrastructure providers that are operating at net zero by 2030 and is doing this by offsetting their carbon emissions by planting the equivalent trees. In 2020, we had offset 100% of our carbon emissions and with over 25,000 trees planted in 2021 and 53,000 trees planted in Pennsylvania and Georgia alone in 2022, we are going a long way to working towards net zero. Additionally, other initiatives like Crypto Climate Accord are working towards a goal of having every blockchain powered by renewable energy by the year 2025.
The Increase of Environmentally Friendly Cryptocurrencies
There are newer cryptocurrencies incorporating renewable energy into their models. For example, Nano is a low-energy cryptocurrency that has been in circulation since 2015. This is one approach that avoids mining but focuses on the latest blockchain technology which creates user blockchains for everybody on that network. The currency Gridcoin uses the power from idle computers connected to the network for scientific research, powering a number of projects through the Berkeley Open Infrastructure for Network Computing (BOINC).
How Can Cryptocurrency Be More Sustainable?
The entire crypto network has invested millions of dollars in infrastructure and hardware, meaning the transition to an energy-efficient system is not going to happen overnight. However, there are growing number of newer projects seeking to reduce cryptocurrency’s carbon footprint.
The creation of the new Bitcoin Mining Council was born out of Elon Musk meeting with crypto mining companies’ CEOs about their energy use. Ethereum is aiming to reduce its energy use by transitioning to an alternative validation system known as proof-of-stake, which doesn’t require computers to solve the puzzles to verify the transactions, and works more like a lottery. Other ideas include moving bitcoin operations near oil fields where they tap waste methane gas and pipe it to generators to power Bitcoin mining.
This is an industry that cannot avoid climate change at all and will require significant investment, innovation, and care from everyone involved so we can truly invest in making a change for the sake of the planet.
