Hello all! Thank you for reading this week’s Sunday Post. We decided to have a quick look at the environmental impacts of cryptocurrency. Recently non-fungible tokens (NFT), or a digital artwork with unique code that authenticates it, have become much more popular with one such piece selling for $69 billion last month. NFTs relied on the same processes that generate cryptocurrency by using specialized computers to solve increasingly difficult puzzles to mine coins. These puzzles are difficult on purpose to prevent cheating, yet leads to an energy-intensive system that produces more energy per dollar than any physical form of currency mining. Many studies find that the whole mining process is tremendously detrimental to the environment. As most energy is still produced by fossil fuels, cryptocurrency contributes to a significant portion of greenhouse gas emissions. Bitcoin and Ethereum mining on their own uses more electricity than whole countries in some estimates. Other estimates find that creating an average NFT produces as much emissions as a 500 mile trip in a gas car. It is also difficult to regulate the industry and spread awareness of this issue as the environmental impact is masked to the consumer. An artist pays a miner to generate the token and to them, it is just a few clicks on their computer. And as cryptocurrencies are highly decentralized, there is no straightforward way to enact a new system for every currency. The Crypto Climate Accord is one pact that aims to address this issue, though. A private sector initiative, it plans to transition all blockchains to renewable energy by 2030, reach net zero emissions by 2040, and develop an accounting standard to measure emissions and energy usage. Some experts say the purposefully inefficient nature of mining, especially for Bitcoin, would compete with the public for energy and force utilities to use fossil fuels if renewable energy can’t keep up. Currently it is just a plan on a paper, though perhaps in the future there will be substantial action on cryptocurrency.
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March 2019
"There is nothing in which the birds differ more than man than the way that they can build and yet leave the landscape as it was before." |