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Even if you don’t personally invest in cryptocurrency, chances are you know somebody who does. But concern is rising over the massive environmental costs associated with the digital currency, leading experts to wonder whether or not it’s doing more harm than good.
What’s happening?
Each time a person makes a cryptocurrency transaction — such as buying, trading, or selling currencies like Bitcoin and Ethereum — they trigger a cascade of energy-intensive processes called mining. Namely, this consists of generating transaction codes, which are needed to validate and approve each transaction. These codes are generated at scale by massive computer banks that run programs, day in and day out, in enormous, highly air-conditioned facilities.
All of this means that the crypto industry is extremely energy-intensive.
One study, published in the Journal of Scientech Research and Development, said that crypto mining has resulted in “serious environmental consequences” and is generating a “substantial carbon footprint and broad environmental repercussions.”
The study revealed that in the last several years, “the Bitcoin mining network alone has consumed electricity comparable to that of several major countries worldwide.”
It also pointed out the impact — due to the land, HVAC, and energy use of their facilities — on water resources and land.
Why is this concerning?
Many people who buy and sell cryptocurrencies are unaware of the massive environmental damage they’re wreaking with each transaction. There are even many currencies marketed specifically towards environmentally-conscious buyers. These currencies use greenwashing in their messaging despite the fact that their growth contributes to significant planet-warming pollution.
There are also major concerns surrounding the investments made and the pollution generated indirectly. Reporting from nonprofit group Carbon Disclosure Project found that the finance sector, in addition to generating its own air pollution, generates 700 times as much pollution from its investments. And with cryptocurrency growing in popularity, many scientists are deeply worried about the future potential for heat-trapping pollution for the sector.
What’s being done to address this?
The study did present possible solutions, though it urged readers to remember that each will come with its own difficulties.
These solutions include regulating the industry’s energy use more directly, transitioning the mining facilities to renewable energy sources, like solar and wind, and using more efficient mining technologies.
They also emphasized the need for further research to inform policy and decision-making.
If you invest in cryptocurrency, consider investing more of your funds in carbon-neutral currencies, and let your friends, family, and fellow investors know so that they can be informed investors.
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