Earth Matters: Cryptocurrency not a green choice

Earth Matters: Cryptocurrency not a green choice

By Patti Wood

I admit that I am more than a little hesitant to write about a technology I don’t fully understand. There is some comfort, however, in knowing I am not alone. In casual conversations with much smarter people than myself, the topic of cryptocurrency has been mentioned with a dismissive comment, something like “it’s some new technology to use digital money over the internet, but I don’t understand how it works.”

If you really want to learn about cryptocurrency, you can take a six-week online course at the MIT Media Lab or a Blockchain Certificate Program at the Wharton School (University of Pennsylvania) or take the Cryptocurrency and Blockchain course at Cornell University and get your Blockchain Essentials Certificate. Who has the time? Do we just have to trust those who do take those courses to advise us?

As we have seen many times before, many new technologies are eventually widely accepted by the public, even if not fully understood. As I write this column, even my Mac Air computer keeps underlining cryptocurrency and blockchain as words it doesn’t recognize.

What I do understand and want to share with you is the enormous carbon footprint some forms of this new technology can have, and how embracing this as the new way to handle our money may be setting us way back when it comes to attaining our greenhouse gas reduction goals and cleaning up our environment. But first, for those of you like me with limited knowledge of this technology, here is a bit more information.

Cryptocurrency was given its name because it uses encryption to verify transactions using advanced coding in storing and transmitting cryptocurrency data between digital “wallets” and public ledgers. It is a digital payment system that doesn’t rely on banks to verify transactions. Instead of money in the form of the coins and bills you can carry in your pocket or wallet, cryptocurrency exists only as digital entries into an online database.

So, if this is not happening at your local bank branch, where is it happening? Is there a brick and mortar location? A real world place? Actually, yes, but all cryptocurrency operations are not alike. Some are much worse than others.

Block chain transactions (a system of recording information in a way that makes it difficult to change, hack, or cheat the system) that use “Proof of Work” authentication methods for cryptocurrency operations employ thousands of high-powered computers that operate around the clock (24/7/365) to solve complex mathematical equations. The more machines working on the solution, the better the chances are that the operator solves the problem first and profits. This Proof of Work technology consumes astronomical amounts of energy. It is so energy intensive that it has been shown to rival the energy consumption of entire countries like South Africa.

In fact, the intensive amount of energy required for cryptocurrency mining operations utilizing Proof of Work authentication methods to validate blockchain transactions is forcing the companies to build their data centers in or near to power plants. This is actually happening in upstate New York near Seneca Lake where an old shuttered coal power plant, the Greenidge Generating Station, has been upgraded and now burns fracked natural gas and is essentially a private power plant for the industry.

Plans to expand the plant from 7,000 to 30,000 networked computers, or “miners,” will require the burning of more fossil fuels, undermining the state’s stated critical climate goals for greenhouse gas emissions established under the Climate Leadership and Community Protection Act. In one year alone, CO2- equivalents and NOx emissions released from the facility increased tenfold.

The process also uses tremendous volumes of water, which when returned to its source (in this case Seneca Lake), is hot, killing fish and other aquatic organisms and impacting regional economies, such as tourism and the fishing and agricultural industries. This particular body of water is also a public drinking water source, which can be degraded by algae growth and toxic air pollutants coming from the power plant. Greenidge is permitted to withdraw 139 million gallons of Seneca Lake water per day and discharge 134 million gallons per day at temperatures of up to 108 degrees Fahrenheit.

And there is the noise pollution that emanates from the huge fans running 24/7 used to cool rooms and equipment, so much so that neighboring communities are already complaining about it, including the harm to their health caused by the noise.

Finally, the computers used for these operations only last about two years, which results in the creation of voluminous amounts of e-waste, another major environmental concern yet to be adequately addressed.

According to Fortune Magazine, China was the first major economy to ban crypto. The country first prohibited financial institutions from engaging in any crypto transactions in May. Then it banned all domestic crypto mining in June, and finally outlawed cryptocurrencies outright in September. The world’s second largest economy had been a leader in mining for cryptocurrencies, but the Chinese government said it was concerned about the effect on the environment and falling short of its pledged climate goals, as well as people using digital currencies for fraud and money laundering. To date, eight other countries have also banned cryptocurrency operations.

As a founder of an environmental health non-profit, I have watched technology companies and other industries get way out ahead of the science and in their rush to recoup their investments and start turning a profit, dismiss their responsibility to consider the human health and environmental impact of their new ideas and innovations. Technology and environmental stewardship can go hand in hand, but it all has to part of the equation when new ideas take shape in board rooms across the world.

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