The detail of the “dirty currency”
When, at the time of writing, a record-breaking heatwave is being blamed for the deaths of hundreds of people in Canada, it seems almost abhorrent to even be considering adding to the problem by mining your own cryptocurrency.
As our guide to mining makes clear, you don’t get serious quantities of crypto by running mining operations in the background on your desktop PC anymore. You need dedicated rigs that guzzle vast chunks of any profits earned on the sheer amount of energy they consume. To restate a fact: large-scale cryptomining consumes around 1% of global electricity. None of that is helping us to get to net zero.
This – somewhat curiously – led one of Bitcoin’s biggest cheerleaders to announce recently that it would no longer accept cryptocurrency. “We are concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel,” wrote Tesla’s CEO Elon Musk in May, only two months after the company announced that it would accept Bitcoin for vehicle purchases for the first time. “Cryptocurrency is a good idea… but this cannot come at great cost to the environment.”
How great is that cost? Until a recent slump in mining caused by China banning cryptomining in certain regions, the Cambridge Bitcoin Electricity Consumption index put Bitcoin’s electricity consumption roughly on par with that of a medium-sized European country, such as Sweden or Ukraine. China accounts for around 65% of all Bitcoin generation, according to the index, with the US running a very distant second on 7.2%, so that Chinese ban could be very significant indeed – if it lasts, and if production isn’t simply exported elsewhere. Russia is, notably, third on the list of mining superpowers and shifting all that heavy equipment across borders will come at an environmental cost of its own.
“Bitcoin could be the first inefficient version of a disruptive technology,” Dr Larisa Yarovaya, a lecturer at the University of Southampton told the Financial Times recently. “It should die for the common good of the planet and be replaced by a new model. It consumes more electricity than a country. All the rest is detail.”
Hardware generation
The environmental cost of cryptocurrency mining isn’t only felt in electricity consumption. The massive rigs of graphics cards and other components that form a mining rig aren’t made from wood grown in sustainable forests and recycled yoghurt pots.
Anyone who’s tried to buy a graphics card in recent months will know that they have been in shorter supply than loo roll at the start of the pandemic, because the cryptominers have been gobbling them all up. The shortage became so acute that Nvidia hobbled certain models’ ability to mine cryptocurrencies so that some cards still get into the hands of gamers – although it’s also selling crypto-dedicated GPUs, so it’s not exactly discouraging the practice either.
Nvidia’s environmental responsibility policy might state that its goal is to “reduce the environmental impact of our products in design and manufacturing”, but it can’t get away from the fact that GPUs and the memory in graphics cards are a hefty cocktail of silicon, copper, boron, cobalt, tungsten and chemicals. Some of those raw materials are in short supply, which is in part to blame for the global CPU shortage. Rare-earth materials are – in part – being used up to mine highly volatile virtual currencies.
Can it go green?
There is, at least, evidence of self-awareness of the harm being caused within the industry. The Crypto Climate Accord ( cryptoclimate.org), founded earlier this year, describes itself as “a private sector-led initiative for the entire crypto community focused on decarbonising the cryptocurrency industry in record time”.
The Accord – which is backed by some big names from the crypto industry – seems largely focused on de-carbonising the electricity the industry consumes, aiming to make mining use 100% renewable energy by 2030. That is, to be fair, more aggressive than many climate targets, but given that much of the mining is undertaken by unofficial farms in China, it’s highly unlikely to clean up the entire practice.
And even if it does move generation to solar, wind and other renewable electricity sources within nine years, the question remains: wouldn’t that energy still be better used to power something more worthwhile?