We can, in a legitimate way, ask the question of the carbon balance of cryptocurrencies because when we look more closely about it, we are quickly in capacity to understand that this virtual currency, even though secured and postage paid of classic systems like banks, isn’t less just a bit eco-friendly. Between the carbon impact generated by the constant exponential demand of energy, often fossil, and environmental impact and fauna and flora, without forgetting the human impact, the question of the legitimacy of these digital currencies is to be reconsidered because of GIEC reports becoming more and more alarming. However, don’t there exist some alternatives to make the virtual currency more ecologic?
CO2 impact of cryptocurrencies
Understand the cryptocurrency and the CO2 impact is a necessary issue and required when we talk about this topic. The balance is multiple because like with the case of carbon footprint of data centers, the impact is on one hand invisible at first glance. On another hand, it has many facets: carbon impact with all rejected emissions. At issue, energies which depend on the computers and the cooling systems to work. A lot of them are in fact from fossil energies like coal. Direct environmental impact on fauna and flora during the extraction of materials but invisible to the eyes of consumer countries of these last digital technologies. Owning a phone doesn’t tell us the way it has been created and all the ecological consequences behind this object. Then, we can’t omit either to think about the social impact of the construction of these objects. The extraction work is dangerous and tough. And sometimes, in developing countries, in conditions of exercise and remuneration far from our western standards.
So concerning the direct carbon impact of cryptocurrencies, what about it?
According to the study of Bitcoin’s growing e-waste problem a transaction on this blockchain would generate 270g of waste. According to another study by Cambridge University, Bitcoin consumes more than 100 TWh of energy per year on average. In 2021, this figure is higher. We’ll see it then. A consumption that is located behind the consumption of a country like the Netherlands and… in front of the Philippines or Finland.
How do we get these data?
Mining: great energy consumer
A majority of cryptocurrencies are created thanks to mining. This consists of validating a set of data transactions (blockchain) in exchange of a reward: often of virtual currency. This validation is done by resolving calculations with the help of computers very powerful and specific for encryption. It’s the role of diggers.
Also, mining requires the work of many different diggers to validate the blockchain. What multiplies, in fact, the electric consumption. More there are bitcoins, more the process is tedious and ask further work for diggers.
When we consider the whole process of creation and exchange of bitcoin, it reveals that the production of a unity (a token) uses the same quantity of energy as 779 credit card transactions through systems of classic banks.
Finally, still concerning bitcoin, it has consumed 143 TWh in 2021. To give us an equivalence, Norway consumes 124 TWh.
But the carbon impact isn’t the only environmental impact to take into account in the calculation.
Extraction of ores and materials
The environmental impacts of the extraction of materials isn’t negligible when we want to take into account the global impact of virtual currencies. Indeed, we need to have an idea, even if only approximate, an order of magnitude of the pollution in terms of carbon emissions. But to create the cryptocurrency, we need digital objects. More exactly computers very powerful.
And you create them, we need to start by having the necessary materials.
Guillaume Pitron, in his book The war of rare metals, explains in detail the extraction methods and the environmental consequences. The technique that is most currently used is the next one: we need to clean the soil in the surface in order to make it virgin to all forms of life: vegetals, animals, etc. Thus, it’s easier to dig galleries to the ores. 2 sprays the elements of every scoop, we use chemical substances which will be then discharged and will cause the pollution of soils and groundwater. Entraining here itself, a deterioration of the quality of water: for human beings and the whole fauna and flora.
Moreover, Olivier Vidal, search at the CNRS, indicates that at the current rhythm of extraction, the exhaustion of about 15 base metals and rare metals is possible by 2060.
On the contrary, the demand can’t stop growing.
All these aspects, we have already detailed in an article on unsuspicious impacts of digital pollution.
Social impact
Mining extraction is subject to environmental regulations. And for this reason, this activity is relatively unknown in Europe and most largely in Occident. Thus, these activities are relocated to countries that cannot refuse the exploitation of their soils.
In fact: the implementation of mine is almost never based on the opinion of the local population. Thus, the latter are affected directly by the pollution of soils, air and water. Economic activities are declining because of water rarefaction and its quality became mediocre. In addition, air pollution can cause an increase in the number of people affected by respiratory, skin or cancerous diseases.
Still in The war of rare metals, Guillaume Pitron, after six years of research, tells us his experience about the living people: “residents live by 1000 in what we call the “cancer villages” because people die one after another”. As we already said, the air and water pollution contribute to this scourge. But we also can find charged metallic dust in radioactivity. Thus, the cancer rates of residents living close to mines is higher.
Environmental impact of cryptocurrencies
The main country in terms of mining of cryptocurrency proposes an electricity at low cost but very polluting in terms of carbon emissions. It’s the case for Russia and the United States for 59% of their electricity that comes from fossil energies.
Diggers set up in these countries for this reason but also for another… the weather! Indeed, like every electric installation, they produce heat. We already talked about in our article concerning the carbon impacts of data centers. In fact, in order to limit the costs and avoid a too much important investment in the cooling system, the cold weather is chosen like a natural way to cool.
But, and we have seen it in this article and in the definition of cryptocurrencies, these ones are generating CO2 and participate sustainably for global warming.
Even if they have no direct impact on the cold weather at the time, they will have one in reason of the huge quantity of carbon rejected.
Finally, according to a study (https://www.sciencedirect.com/science/article/abs/pii/S0921344921005103?via%3Dihub ) published in December 2021, the electronic wastes in direct link with the Bitcoin would be about 30 700 every year. As much as the quantity of electronic equipment wastes of the Netherlands.
In addition, in March 2021, Bitcoin transactions need 2200kWh. To imagine what it can represent, it’s the double of the quantity of energy consumed by an American house in a month.
In front of these huge energy consuming numbers, many approaches have been studied.
Cryptocurrencies greener?
We just saw it, the creation of cryptocurrency is not the best in terms of environmental preservation. This asks a huge consumption of digital material and the energy needed is colossal. Especially when this energy is not green. The Crypto Climate Accord foresees to feed every cryptocurrency by green energies. However, this seems pretty ambitious when we know that there are more and more demands, and sometimes in these areas where the exerted pressure on infrastructures is not planned. In fact, some experts estimate that carbon compensation would be a great option. (https://trustmyscience.com/cryptomonnaies-seront-elles-un-jour-plus-vertes/ )
In terms of knowing if carbon compensation is a good or bad idea, we talk about it in another dedicated article.
Conclusion
The carbon footprints in the environmental and human impacts of virtual currencies have to be taken into account for the future of our companies. If we want to reach the digital celebrity, we need to rethink our consumption methods, at the same time of objects but also of the Internet.
Nowadays the cryptocurrency is:
- 143 TWh in 2021;
- the pollution of a unity (a token) is equivalent of 779 credit card transactions;
- electronic wastes in direct link with the Bitcoin would be about 30,700 tons;
- the environmental pollution linked to the extraction of necessary materials for the production of computers for the encrypting of blockchains causes pollution of soils, water and a catastrophic air.
So how to allow blockchain technologies and cryptocurrencies to continue being used without jeopardizing the environmental future of the planet? By using these technologies when they are only necessary, by reducing needs of energy and material of the algorithms, and maybe but imagine complementary mechanisms.
Some cryptocurrencies offset their carbon emissions by created pieces during the project of carbon reduction. And if Greenoco would give tokens for every ton of CO2 avoided thanks to our technology? To create a cryptocurrency greener, less consumer in resources, and neutral in carbon?
In the meantime, we keep going to decarbonate the web, for a digital future more respectful of the environment by measuring and reducing the carbon footprint of websites. Don’t hesitate to contact us to start your approach.
