Cryptocurrency is a digital token with a cryptographic reference to the blockchain. To maintain security, the more Bitcoin mined, the more energy is required to process transactions. In addition to the limited supply of Bitcoin, the incentives associated with mining exacerbate the energy requirements. For example, in the case of Bitcoin mining, the miner earns a small amount of cryptocurrency for solving a proof of work (PoW) algorithm.
One of the most prominent concerns of environmentalists and industry executives is the carbon footprint of crypto mining. While it has long been assumed that the crypto industry was moving toward a more environmentally-friendly future, the Chinese government’s recent ban on cryptocurrency mining has spurred the exodus of miners to countries where renewable energy isn’t as abundant. And while the global economy is moving towards renewable energy, the industry’s carbon footprint is increasing.
The carbon footprint of crypto mining is enormous. According to Digiconomist, mining Bitcoin generates over 37 megatons of carbon dioxide per year, which is equivalent to the power consumed by Sri Lanka. Since energy consumption increases rapidly, the carbon footprint of cryptocurrency mining will also increase. And most of the energy that is used in mining Bitcoin comes from fossil fuels with high carbon emissions. As a result, the energy consumption intensity is directly related to the carbon footprint of the cryptocurrency blockchain.
Fortunately, there are reliable options available to offset the carbon emissions from Bitcoin mining. These carbon offsets can buy the world time to transition to clean energy sources. However, the transition will take a long time as the energy needs of the crypto industry are set to increase. Therefore, effective carbon offsets are critical to reducing the crypto industry’s collective carbon footprint. This way, everyone will be able to benefit from Bitcoin’s growing popularity.
Toxic chemicals released
Cryptocurrency miners may not be able to avoid releasing several potentially harmful chemicals into the environment. New York State’s Public Service Commission has imposed a temporary moratorium on new cryptocurrency mining operations, and the commission is currently drafting a policy for power-hungry customers.
Environmental groups are calling on the EPA to investigate the impact of crypto mining on local ecosystems. They say that emissions from crypto mining facilities are linked to increased carbon dioxide emissions and the production of toxic chemicals. This pollution has been linked to cardiovascular and respiratory diseases.
In addition to the greenhouse gas emissions, cryptocurrency mining is also responsible for large amounts of electronic waste, including computers and graphic cards. Many of these chemicals can leach into water and be released into the air. Unfortunately, most of this pollution is not aimed at those who profit from crypto mining. The energy used by cryptocurrency miners affects the stability of the electric grid and worsens the shortage of electricity during peak use times. Cryptomining is a significant contributor to climate change.
The EPA’s Toxics Release Inventory (TRI) has been updated annually since the mines released toxic chemicals into the atmosphere. This inventory contains information on over 770 different chemicals in 33 categories. The EPA lists poisonous chemicals released by crypto mining facilities in a centralized database, and the TRI website provides more information.
Proof of work consensus mechanism
The Proof of Work consensus mechanism is one of the most popular ways to validate transactions in cryptocurrency. It was developed in 1993 and was applied to Bitcoin in 2008. This consensus mechanism helps secure the cryptocurrency network and protect miners by increasing the difficulty of changing data over time. Each participating node must prove that they have completed the task before adding it to the chain. This mechanism also prevents the centralization of computational resources. A personal computer can be a node.
Another popular method is the proof of stake (PoS) consensus mechanism. With this type of consensus, the number of transactions in a block is limited, and the PoS method theoretically requires less electricity. It is potentially energy-efficient and has been adopted by more than 400 cryptocurrencies. The PoS consensus mechanism is similar to the PoW consensus, and this model is based on the idea of a distributed network. The main disadvantage of PoW is the high energy consumption involved in validation.
The PoW consensus mechanism is also very costly for miners, and miners must pay for electricity to process blocks that use electricity. This energy consumption is critical for maintaining the integrity of the network since it ensures the accuracy of transactions and a credible monetary policy.
Greenidge Generation LLC
A power plant owned by a cryptocurrency mining company in New York State generates enough electricity to run a 24/7 Bitcoin mining operation. The power plant supports almost 20,000 computers and produced 1,866 Bitcoin last year, and its power plan has reportedly generated $50,000 in Bitcoin mining by March 2020.
Greenidge has planned to double its computing power by increasing power generation to its total capacity, which is problematic for the local environment. The plant once operated as a coal power plant but closed down in 2011. The company’s revival threatens the local ecosystem with the potential for spills and toxic emissions.
The company’s controversial plans have garnered the attention of the mainstream media, and Senator Elizabeth Warren recently asked Greenidge CEO Jeff Kirk about the emissions related to Bitcoin mining. In addition to this, several groups have commented on the permit renewal. While the company cites carbon offsets to justify its energy use, locals say that the power plant’s operations are detrimental to the environment. Greenidge has switched from coal to natural gas. The company’s facility also has access to the cheapest natural gas in the U.S.
The company is a local icon in Upstate New York, employs dozens of locals, and has become a significant source of employment. It also creates attractive new blockchain jobs, and this project is an essential anchor for the region’s economy. While some residents are concerned about Greenidge, others cheer for the latest developments.
Environmental groups have been rallying against the plan for the facility for months. Several organizations have been fighting the project with the state legislature. Seneca Lake Guardian and Committee to Preserve the Finger Lakes (CPFT) have urged Governor Hochul to deny the permit application. Despite this controversy, the Town of Torrey Planning Board approved the Amended Site Plan Approval Resolution and EAF Part 2 on April 19, 2021.