The world’s largest cryptocurrency, Bitcoin, is mined with a process that emits carbon into the atmosphere. This has led to miners struggling to cut emissions while still mining efficiently.
The cryptocurrency carbon footprint comparison is a blog post that compares the carbon emissions of different cryptocurrencies.
Bitcoin mining has a poor image for using a lot of cheap energy in the sake of profit. To some extent, bitcoin miners are now attempting to become green.
Bitcoin mining companies are trying to power their computers with sustainable energy or sign up for solar or wind-powered data centers. Renewable energy costs are falling, while bitcoin prices are increasing, making it possible to make a profit.
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However, coal, the cheapest and dirtiest power source, is still used for a large portion of bitcoin mining. “Crypto has a carbon intensity problem,” said Paolo Natali of the Rocky Mountain Institute’s Climate Intelligence program.
The Crypto Climate Accord, a voluntary framework that encourages cryptocurrency companies to decrease net carbon emissions from energy to zero by 2030, was born out of this issue in April. According to Mr. Natali, 180 businesses have joined up.
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The miners claim to be concerned about the environment, but they also have financial incentives to decrease carbon emissions: investors, who are increasingly include carbon emissions in their research, are pressuring them to do better.
New York legislators are contemplating a measure that would prohibit the use of fossil fuels in bitcoin mining and require miners to verify their carbon footprints. The Securities and Exchange Commission is also debating whether publicly listed businesses should be required to publish climate data.
To validate transactions, several of the most valuable cryptocurrencies, including bitcoin, use an energy-intensive method known as proof of work. This requires a lot of processing power, which necessitates a lot of energy.
A bitcoin-mining operation in upstate New York is fueled by energy generated by a Niagara River-based hydroelectric generator. The firm is part of a group of miners working to make the sector more ecologically and financially viable. Alex Kuzoian/WSJ illustration
The higher the profit, the lower the power price. Some miners are reopening previously shuttered coal-fired facilities since the cheapest supplies are often the dirtiest. Mixing green electricity with coal, natural gas, or other sources may offer miners an advantage in areas with plentiful renewable resources.
“If you’re mining bitcoin, you worry about energy costs and don’t have the luxury of caring about the environment,” said Alex de Vries, an economist who developed the Bitcoin Energy Consumption Index.
Gryphon Digital Mining became a member of the Crypto Climate Accord in May and claims to have zero carbon emissions. It achieved this by constructing a 21-megawatt hydroelectric plant and partnering with a digital hosting business that uses more than half of its energy from renewable sources. It bridges the gap by purchasing carbon offset certificates, similar to how an airline passenger may reduce carbon emissions.
Some bitcoin miners are addressing their energy requirements by reactivating disused coal-fired power stations, like this one in New York.
Julie Jacobson/Associated Press photo
Gryphon Chief Executive Rob Chang said, “It’s because we wanted to be corporate decent stewards of the planet.”
According to a survey of 280 crypto firms conducted by the University of Cambridge’s Centre for Alternative Finance, about 76 percent of firms mining proof-of-work cryptocurrencies combine green and fossil-fuel power sources, but less than 40 percent of the total energy used to mine bitcoin and other cryptocurrencies comes from renewable sources.
Crypto miners’ use of renewable energy, however, may compel utilities to produce more electricity from fossil fuels, according to Mr. de Vries. Bitcoin miners in El Salvador use green energy generated by a volcano to power their operations. According to the International Trade Administration, despite having abundant renewable resources, the Central American country imported almost 20% of the fuel needed to produce energy in 2019.
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Mr. de Vries said, “If you put green energy into bitcoin miners, you’ll have to increase your fossil-fuel imports.” “All you’re doing is relocating the issue.”
Following China’s prohibition on bitcoin and its ilk, cryptocurrency mining has surged in the United States and Canada. According to the Cambridge Centre for Alternative Finance, the United States and Canada accounted for 45 percent of worldwide bitcoin mining activity in August, up from 12 percent in January. Bitcoin mining activity dropped by 20% at that time after Chinese miners were shut down.
Some of the most significant businesses in the crypto industry are now focused on carbon emissions. A spokesperson for Coinbase Currency 2.97 percent, a publicly listed digital coin exchange, said the business is now focused on environmental problems and would announce climate change initiatives in the coming weeks.
Shane Shifflett can be reached at [email protected]
Where Money and the Environment Collide
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Carbon emissions are a huge problem in the crypto mining industry. The carbon neutral bitcoin mining is an attempt to make it easier on the environment by reducing carbon emissions.
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