Cryptocurrencies are disrupting
the financial world as we know it.
And many newcomer investors have
made a lot of cash on this hype.
"It introduces so many opportunities,
so many unique business models."
"People say blockchain could end companies, as we know them."
But it’s not all champagne and super yachts.
Mining new cryptocurrency, and particularly
Bitcoin, is actually kind of an environmental nightmare.
Using up huge amounts of electricity and generating thousands
of tonnes of Electronic trash in the process.
But some new players in the crypto community are
trying to change that.
"We’re using crypto to clean up the environment."
So Is it possible to green up bitcoin's dirty track record?
And can mining digital currency ever
actually be good for the environment?
In 2021, bitcoin mining guzzled more electricity
than the whole country of Thailand uses each year.
And much of that power currently came from
burning cheap fossil fuels.
Definitely not green or clean.
Let's start off with a little crash course on crypto.
We’re going to focus on bitcoin, the most
popular and widely owned digital currency.
To generate new coins they have to be mined and
then recorded on the blockchain.
The blockchain is essentially a permanent digital record
of all the bitcoin transactions going on.
And it’s decentralized.
So to keep expanding the blockchain, millions of computers
around the world have to show what’s called “proof of work”,
focusing all of their energy on playing an
ongoing game of ‘guess the right number’
to unlock new blocks on the blockchain
and win bitcoin rewards.
Lucrative for bitcoin miners, but highly
unsustainable for the planet.
Right now, you would release more CO2 into the
atmosphere making one bitcoin transaction
than you would taking a 6-hour flight
from New York to Amsterdam.
That’s around 2 million times more carbon emissions
than a single Visa payment.
Then there’s the E-waste.
The mining computers burnout or need to be
upgraded roughly every 12-18 months.
"On the whole, the Bitcoin network is absolutely not green."
This is the Dutch Economist Alex de Vries.
He set up the bitcoin energy consumption index
back in 2014 to track the situation.
"I think there will be a limit to how much
governments will accept from this type of system.
We already saw China banning Bitcoin mining.
We're seeing these types of options being raised
in Europe at the moment.
Everyone's trying to realize their climate ambitions."
Of all digital currencies out there,
bitcoin is by far the worst offender
when it comes to the environment.
The clock seems to be ticking for
crypto's most famous poster child to clean up its act.
But, how could that work?
A US company called Stronghold Digital Mining
has come up with a solution.
And it all centers around these piles of
abandoned toxic waste, known as GOB.
"The GOB piles are very, very personal to me because
I grew up in and amongst them my entire life."
Bill Spence is co-chairman and a cancer survivor.
Having long suspected that his kidney cancer was
linked to playing on the GOB piles as a child,
he’s now on a mission to clean them up.
"There's been commercial mining in
Pennsylvania for about 230 years.
And these GOB piles are the remnants
or waste from that mining.
And they sat unchecked and really
created an environmental impairment to our communities."
There are hundreds of tonnes of GOB in Pennsylvania alone.
Sometimes they’ll spontaneously combust,
adding dangerous pollutants into the air.
And when it rains, toxic chemicals and heavy metals
get washed into the groundwater and rivers too.
Bill wanted to find solutions to this public health hazard.
In 2017 he bought the Scrubgrass Power Plant in Northern Pittsburgh.
It’s a facility specifically designed to generate
electric power from safely burning the GOB.
The process still releases CO2 but removes
the acid gases and toxic particulates.
The waste ash that’s leftover is also a green bi-product.
It gets used as fertilizer to regenerate the surrounding land.
So far, so good.
But the financial numbers just weren’t adding up
to make the power plant a profitable business.
The local grid had enough cheap power from natural gas in
the area and didn’t need to buy much more.
But Bill and his team had an idea.
What if they could turn the toxic GOB into Bitcoin?
They built and integrated computer rigs into the powerplant site
and used their cheap electricity to start mining.
Suddenly, cleaning up GOB piles had
become a very lucrative business –
that didn’t need to stop on the borders of Pennsylvania.
"There are problems like this in other regions, ours is waste coal.
There are other regions that have other contamination
that potentially you could do things,
that you could use cryptocurrency to adapt
and build other forms of power."
But not everyone can burn GOB piles.
And the cleanup still doesn’t solve the CO2 emissions problem.
So what about using green power sources to mine bitcoin?
Texas is the cheap oil and gas capital of the US,
but also has huge, untapped potential
for green energy development.
"There is more wind and solar in Texas than we could ever harvest."
Jesse Peltan is the Chief technology officer
of HODL ranch, a bitcoin mining company
that only uses renewable power.
"We see a huge opportunity for Bitcoin mining
to be mutually beneficial for the grid."
They can act as a buffer in times of power surge
and use energy that would otherwise go to waste.
"But then at times when the grid is stressed,
when it really needs that capacity,
we can turn off and give that capacity back to the grid."
The Texas miners can make a good profit selling
their unused power back to the grid.
But what if international power grids
can’t, or won’t, subsidize the downtime
for the green energy-powered miners?
"They will inevitably be losing the competition
to the rest of the network.
And the ones that will survive will be the ones with
the most stable power sources.
And those unfortunately, typically happen
to be fossil fuel based power sources."
As renewable energy becomes cheaper. A hybrid power model is becoming
more popular with bitcoin miners.
In 2021, 56% of bitcoin’s global power usage
came from renewable sources.
But with so much of that energy being wasted
to show "proof of work", Bitcoin is still not
cutting it when it comes to sustainability.
Other smaller crypto currencies like
Cardano, Tron, Polkadot and EOS
were designed from the beginning to use
a more efficient mining system called “proof of stake.”
It uses about 99% less energy to run
because individual mining devices can verify transactions.
Rather than the whole network competing,
individuals stake some of the coins they
already own as a security deposit,
and the system randomly chooses
who gets to "mine," more coins.
If you still want to stick with bitcoin
but are concerned about the carbon emissions,
the underlying blockchain technology can help with that.
You can now offset your footprint by purchasing
carbon credit tokens that are blockchain verified.
The money you invest travels directly via
blockchain to fund conservation efforts.
Crypto celebrities the Winklevoss twins
just invested $4 million dollars to offset their
Bitcoin holdings for their crypto exchange Gemini,
and Jack Dorsey’s payment company, Square –
recently renamed Block – has also committed
$10 million dollars to green energy projects.
But if you don't have a couple of million
chilling in your bank account or your crypto wallet,
can you still do this?
A Brazilian environmental tech company
called Moss.earth is becoming a popular option
for climate-conscious crypto fans.
"And what we have done is to turn crypto investments
into, you know, green investments."
Luis Adaime is the founder of Moss.earth.
Anyone can buy their verified carbon credits at the click of a button.
They’re called MC02 tokens.
"You can calculate your own pollution from, you know,
driving cars using electricity at home, that kind of stuff.
And you can buy the equivalent carbon credits."
Using blockchain tokens provides a clear record
of everyone’s green investment transactions,
and supposedly the money travels directly to
forest conservation projects in the Amazon.
The company says the sale of MC02 tokens
has compensated forest projects with over
$15 million dollars and helped preserve around 500 million trees.
So perhaps In the future, carbon emission offsets
will just be built into all the polluting transactions we make.
"We have created, for example, with wrapped.com,
green Bitcoins, in which when you buy a Bitcoin
it already comes with an allocated amount of carbon credits."
So there are pioneers trying to
clean up crypto's act.
But right now they're still few and far between.
Bitcoin and Digital currencies are here to stay
and if we want to make them sustainable players,
investors, companies and governments
will have to start changing the rules of the game.
"Are you buying any cryptocurrencies?
Which ones?
And how do you feel about their environmental impact?
Let us know in the comments below
and don't forget to subscribe for more videos!"