Do We Have to Choose Between Crypto and the Climate?
There are ways to make crypto cleaner, but we need to move past finger-pointing and build real solutions.
Next week, I’m hosting a panel called the Crypto Climate Challenge at the Techonomy Climate Summit in Mountain View, CA. (If you are interested, tickets are still available.) The title speaks for itself: Crypto requires tremendous energy and sends tons of carbon into the air.
These are the Facts
Bitcoin mining currently uses 0.5% of the world’s energy and generates 62.94 tons of CO2 annually. Ethereum tacks on 25.32 tons of carbon dioxide every year. And these numbers are going up.
This is the Story
Dresden Lakes is in New York State’s Finger Lakes region. It was the home to a coal-fueled power plant until it was shut down in 2011. In 2020, the plant was converted to natural gas and reopened as the Greenidge Generation power plant. It now contains 20,000 computers running 24 hours a day mining Bitcoin. It makes more than $100M a year and is looking to double its generation capacity. (To be fair, a small portion of the plant’s power does go to consumers, but most of it is used for mining)
As you might expect, the smoke coming from the plant never stops. That is how 24/7 operations work. The plant also takes in millions of gallons of water from Seneca lake for its cooling systems, returning the water to the lake an average of 7 degrees warmer. The company admits it could sometimes be as hot as 90 degrees Fahrenheit. Poached fish, anyone?
Greenidge’s production is at odds with New York State’s Climate goals. This particular plant is only 0.2-0.4% of New York’s total energy consumption, but more of these plants are in the works. The state estimates as much as 8% of the state's power could be running to crypto-mining by 2030, a year in which the state has agreed to a cap of 250 million metric tons of carbon dioxide.
The plant is up for certification at the end of this month.
This is the Challenge
Clearly, there is a Crypto Climate Challenge, but what do we do about it? Fortunately, this is where a journalist gets to ask experts for their opinions. I will be joined on stage by Evin Cheikosman, Policy Analyst, Crypto Impact and Sustainability Accelerator (CISA), World Economic Forum, and Sy Zygy, who handles Product & Partnerships for KlimaDAO. Cheikosman has poked holes in the traditional Crypto vs Climate debate and Zygy is actually using blockchain technology to reduce carbon emissions across the globe. There is going to be a follow-up breakout session that will go even deeper into these issues.
Coming from the World Economic Forum, Cheikosman predictably has a more global perspective than the one I outlined above. For Cheikosman, you have to balance the value that crypto is bringing to the developing world before shutting it down over climate concerns:
Globally there are 1.2 billion people who live under hyperinflation, with many using crypto to remedy this. In emerging economies like Kenya, Vietnam, Venezuela, and Brazil, for example, the cost and bureaucracy of legacy financial systems, unstable monetary governance, and currency devaluation drive many people to adopt cryptocurrencies in order to preserve their savings, send and receive remittances, purchase basic goods and carry out business transactions.
Blockchain’s actual energy usage should also be more carefully considered. Cheikosman writes, “There has not been any sort of moral debate regarding the energy impact of household refrigeration or tumble driers, because they fulfill useful functions in our lives.”
Indeed, this chart merits deeper conversation.
Household tumble dryers in the U.S. consume 108 TWh of energy a year, while Bitcoin uses 62 TWh a year
The Techonomy Climate conference is nowhere near the scale of SXSW, nor is there the promise of discovering a new band at the show. (I’m looking at you Wood Burning Savages!) Even so, it is great to be back on the road talking to smart people about the world’s biggest problems. I’ll report back next week.
If you have questions you want me to ask, hit me up in the comments or reach out on Twitter.
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Join Me at Techonomy Climate Summit
Join me at Techonomy Climate on March 29 in Mountain View, CA. The conference brings together climate startup leaders, big company sustainability chiefs, climate tech investors, environmental justice activists, and longtime climate experts for conversations on the most pressing challenges and opportunities.
I will be talking to Evîn Cheikosman, Policy Analyst, Crypto Impact and Sustainability Accelerator, World Economic Forum, about the sustainability of Crypto.
The conference includes over 30 speakers and you can view the full list here.
Registration includes breakfast, lunch, access to all sessions, and a closing cocktail reception. As a Machined member, your ticket to Techonomy Climate is reduced to $199 (Standard price: $299).
Register here: https://techonomy.com/registration/register-for-techonomy-climate/