How Crypto is Killing Us

Crypto mining, the process of creating new cryptocurrency by verifying and adding transactions to a blockchain, has surged in popularity in recent years. The hype originated by nerds in dimly lit basements have transferred over to the general public and now everyone and their grandmother are into trading tokens, coins and whatever you can fit onto the blockchain.

This whole process has been supercharged by the pandemic and the war in Ukraine and to some extent the disillusionment of western democracy. (Side note, It’s still fine and alive and kicking.)

As more people invest in cryptocurrencies like Bitcoin and Ethereum, the demand for mining has increased, leading to a significant environmental impact.

Crypto mining consumes a massive amount of energy. According to a report by Cambridge University, the annual electricity consumption of the Bitcoin network is equivalent to the electricity consumption of the entire country of Argentina. The mining usuring in Sweden, by beloved country of origin, exceeds 1,5 TWh a year. That is the equivalent to 125 000 average homeowners yearly consumption.

This level of energy consumption is not only unsustainable but also has a significant environmental impact. One of the primary sources of energy for crypto mining is coal which gives it a huge carbon footprint and directly contributes to global warming, air pollution, and acid rain. And this is then only exacerbated by the negative impact of coal mining supplying us with a double whammy of pollution.

While less common another source of energy for crypto mining is renewable energy sources, such as wind, hydro and solar power. This makes up a large chunk of the energy mix in Sweden and makes the homegrown crypt a tad better from a carbon footprint standpoint.

While these sources of energy are cleaner than coal, they are not without their environmental impact. The construction and maintenance of wind and solar farms can have a significant impact on the environment and wildlife. Additionally, the mining of rare earth metals, which are essential components of wind turbines and solar panels, can be harmful to the environment and local communities. This is an entire subject in itself but often, not always, there are better energy sources for the planet.

The environmental impact of crypto mining goes beyond energy consumption. The mining of cryptocurrencies requires powerful computer hardware, such as graphics processing units (GPUs), which are often discarded after they become obsolete. This is often overlooked and we tend only to focus on the supply chain issues that have occurred in crypto’s wake. These discarded hardware components can end up in landfills, where they release toxic chemicals into the environment and have a substantial carbon footprint from their production to begin with.

So to sum up this far. Crypto is bad! It generates a landfill of discarded hardware, creates supply chain issues for the non crypt world and eats up massive amounts of energy. Energy that could have been used by other consumers, sometimes from clean sources, as well as enormous amounts that there was no ‘real’ need to produce to meet demand. The enormous need has forced the hand of countries like China to reactivate their coal power plants in fear of rolling blackouts and disgruntled citizens.

All in all, the carbon footprint of crypto mining is significant. According to a study by the Technical University of Munich, the carbon footprint of Bitcoin mining alone is equivalent to the carbon footprint of the entire city of Las Vegas. The city of sin and light in the middle of the desert is almost outshined by Dogecoin and Bored Ape Yacht Club. Shocking!

Luckily there are solutions to reduce crypto minings significant impact. Beside the obvious solution just to ban the practice entirely. (Not a plausible idea however. The cat is out of the bag.)

One solution is to switch to renewable energy sources for crypto mining. Several mining companies (the good or serious ones) have already started using renewable energy sources like wind and solar power, which can reduce the environmental impact of crypto mining.

They may even have a positive impact on the environment as a whole by introducing more renewable energy into the mix as well as using energy that otherwise had gone to waste. The always entertaining and insightful Kal Penn, actor and former White House aide, did a great report for Bloomberg on “energy hawks” and “crypto cowboys” that summarizes it beautifully.

Another solution is to use more energy-efficient mining hardware. Newer hardware is more energy-efficient and produces less heat, reducing the need for cooling systems that consume additional energy. This is also in line with the actions of the serious actors within the space and their commitments to change with the times.

Finally, we can also reduce the amount of e-waste generated by the mining industry by repurposing or recycling outdated hardware components. This can help reduce the environmental impact of crypto mining and reduce the amount of electronic waste in landfills.

To summarize, the rise of cryptocurrencies and the demand for crypto mining have created a significant environmental impact. While crypto mining is still a relatively new industry, it is important to recognize its impact on the environment and take steps to mitigate its negative effects. By tighter regulation and by supporting actors within this space that actually have done the math and tries to do the right thing we can reduce the environmental impact of crypto mining and work towards a more sustainable future.

A future that still allows us to trade meme tokens and to collect images of bored primates playing dress up, but without the apocalyptic undertones of a burning sky and dried up oceans.