How crypto-owning climate activists balance saving the planet with supporting energy-hungry Bitcoin mines

Being a climate activist and a crypto owner at the same time would seem to cause a kind of cognitive dissonance. Rising values of “mined” cryptocurrencies like Bitcoin encourage more mining of the digital coins, which in turn demands the use of more energy—a lot more energy. Bitcoin alone uses nearly 0.5% of all the electricity consumed globally—enough energy to power the Netherlands.

But despite the environmental damage this causes—many crypto mines are located in countries such asChina, the U.S., and Kazakhstan where they use energy derived from coal and other “dirty” carbon sources—a good number of the climate activists at COP26 have not been deterred.

One London-based climate activist chanting outside the COP26 said the environmental argument against using Bitcoin is just a distraction from actual problems in the way power is generated. The protester, who owns Bitcoin, Ethereum, and some smaller coins (though no Shiba Inu), defended his crypto ownership by arguing the growth in renewable energy and the shutting down of fossil fuel exploration and burning—things we should be doing anyway, he said—solve the crypto environment problem.

A French climate activist with dreadlocks neatly tucked under his beanie had a more anarchist approach to the issue. He said the genius of Bitcoin is that it takes power away from central banks. He said he understands cryptocurrencies are inherently capitalistic because they’re speculated upon, but argued that, at their core, they still undermined big institutions that have continued to support fossil fuels in the climate crisis. And as long as cryptocurrencies fight the capitalist establishment, he will support them.

Both also offered another argument: that demand for crypto increases the demand for renewable energy as well as for better blockchain transaction records to track climate investments, both of which would have a positive effect on the environment.

Environmental effects

Despite the support from a number of climate activists at COP26, the environmental side effects of decentralized currencies are hard to ignore. Before China cracked down on Bitcoin mining in July (claiming it undermined Xi Jinping’s environmental goals) and expelled most miners to neighboring countries like Kazakhstan, Bitcoin-mining globally produced more carbon emissions than American Airlines, according to a Bank of America report. And even putting mining aside, a new report by U.K. financial site MoneySuperMarket found each Bitcoin transaction consumes 1,173 kilowatt-hours of electricity, which is enough energy to “power the typical American home for six weeks,” the report authors add. 

Ethereum is not much better. Currently, a single Ethereum transaction consumes as much electricity as an average U.S. household uses in a workweek, boasting a carbon footprint of around 140,893 Visa credit card transactions or 10,595 hours of watching YouTube. 

Faced with the rise in energy consumption that goes along with cryptocurrency mining, some governments are trying to crack down. Swedish authorities today have asked the European Union to ban “energy intensive” crypto mining, and in the U.S., legislators in New York State are considering a bill to ban the use of fossil fuels to mine Bitcoin and other cryptos.

In a report conducted by crypto wallet company Zumo, the Cambridge Centre for Alternative Finance, the Green Bitcoin Project, and the Digiconomist, the authors found that the crypto sector must aim for full decarbonization by 2030 if it wants to reach its full potential.

“For crypto to…be widely adopted by society, the sector urgently needs to address its carbon footprint,” said Kirsteen Harrison, environmental consultant at Zumo.

But despite its popularity and power, detailed plans on how to decarbonize crypto were largely left unaddressed inside the walls of the COP26, leaving climate-crypto activists with little more than small independent initiatives aimed at using blockchain technology to advance climate change objectives.