Environmental Impact
of
Crypto Mining

Since 2020, the process of crypto-mining has skyrocketed. This may seem like a great thing as a lot of people will be able to make lots of money with their new found bitcoin or other digital currency. However this process, “crypto-mining”, greatly damages our already hurting planet. Before I explain why crypto-mining is damaging to the environment, we must first define what crypto mining exactly is.

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Crypto mining is the process in which a computer goes through numerous amounts of complex equations in order to verify and complete a transaction. A transaction in this case would be the process of creating a coin and transferring that coin into the user's wallet. This may seem like a normal and non-problematic process. However, in order for someone to gain bitcoin, they are competing with thousands of other machines. You might be wondering, how does the Bitcoin algorithm know who to give the bitcoin to? Simple, the person with the most computing power, or in other words: whoever can spend the most amount of electricity, and that electricity is produced via fossil fuels. To learn more, you can read my previous article Decrypting Crypto

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In a recent finding, global electricity generation for crypto was found to be 0.3% of global annual greenhouse gas emissions. That may not seem like a lot, but to put into numbers that's about 140 million metric tons of carbon dioxide per year or just under half as much as all of the passenger cars in the United States produced in 2020 (341.2 million metric tons). And that number will continue to grow as more and more countries continue to allow crypto mining to go unchecked. 

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This may seem like crypto mining is only a problem for other countries; however, “The United States is estimated to host about a third of global crypto-asset operations, which currently consume about 0.9% to 1.7% of total U.S. electricity usage.

 

On the bright side there are many solutions to this problem of electricity usage. One way to solve it is to move to renewable energy sources, because the problem isn’t how much electricity we are using, it’s how we generate it is the problem. Governments may also play a role in monitoring the crypto space: “governments can enforce environmental regulations and encourage sustainable practices within the crypto industry. By working in conjunction with the private sector, governments can ensure that the growth of crypto finance aligns with their environmental objectives.” 

 

In conclusion, there is no conceivable way to stop every person in the world from mining crypto. The best we can do is move away from electricity driven by fossil fuels and aim for a much cleaner energy source for not only the crypto space, but for the rest of the world.