Cost of crypto: report says US bitcoin as dirty as 6 million cars — Business

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The car­bon foot­print of the Unit­ed States bit­coin indus­try is ris­ing at break­neck speed, a report from envi­ron­men­tal groups found on Fri­day, now rivalling the emis­sions of six mil­lion cars each year.

The groups urged US states to con­sid­er bans on new min­ing oper­a­tions to help pro­tect the planet.

Emis­sions from the ener­gy-hun­gry sec­tor could under­mine goals to tack­le cli­mate change, said Jere­my Fish­er, an ener­gy ana­lyst with the non-prof­it Sier­ra Club and a co-author of the report.

“We’re at an inflec­tion point,” he said. “We’re try­ing to rapid­ly decar­bonise … Bit­coin min­ing has the poten­tial to undo some of that progress.”

The industry’s car­bon foot­print, the groups said, was 27.4 mil­lion tonnes from mid-2021 through 2022 — three times that of the largest US coal plant — or close to the annu­al emis­sions of six mil­lion cars, accord­ing to a cal­cu­la­tor from the Envi­ron­men­tal Pro­tec­tion Agency.

Bit­coin min­ing involves a net­work of ener­gy-inten­sive com­put­ers that ver­i­fy bit­coin trans­ac­tions, and com­pete among them­selves for new coins. Only 3.5 per cent of glob­al bit­coin min­ing was locat­ed in the Unit­ed States in 2020 — now it’s approach­ing 38pc, accord­ing to a recent study from the White House.

The groups urged US states to con­sid­er block­ing new min­ing oper­a­tions. This year, the New York leg­is­la­ture passed a law to pause any new oper­a­tions in the state that run on fos­sil fuel.

Bit­coin indus­try groups say the cryp­tocur­ren­cy sec­tor is green­er than oth­er heavy indus­tries and uses a rel­a­tive­ly small amount of elec­tric­i­ty — between 0.09pc and 1.7pc of total US pow­er, accord­ing to the White House report.

The Bit­coin Min­ing Coun­cil, which rep­re­sents some major play­ers in the sec­tor, has released data show­ing that more than half the pow­er used by its min­ers comes from renew­able sources.

The coun­cil did not respond to a request for comment.

“Bit­coin is a tech­nol­o­gy with a lot of pos­i­tive and neg­a­tive cli­mate poten­tial,” said Elliot David of Sus­tain­able Bit­coin Pro­to­col, a com­pa­ny that works with min­ers to pro­mote clean ener­gy usage.

“It’s a ques­tion of per­spec­tive — if you are going to com­pare it to oth­er indus­tries, like cement for exam­ple, then its rel­a­tive­ly clean, he told the Thom­son Reuters Foun­da­tion.

“But every indus­try needs to take part in address­ing the cli­mate crisis.”

The report, co-authored by the envi­ron­men­tal law non-prof­it Earth­jus­tice, pulls from pub­lic doc­u­ments, util­i­ty records, reg­u­la­to­ry fil­ings and finan­cial dis­clo­sures, as well as press reports and tes­ti­mo­ny from activists across the Unit­ed States.

Ear­li­er in the year, a coali­tion of green groups launched a cam­paign to pres­sure Bit­coin into chang­ing its soft­ware — known as “proof-of-work” — to a less ener­gy-inten­sive method, known as “proof-of-stake”.

“We’ve seen a rel­a­tive­ly large increase in min­ing here in the US very quick­ly, since it was banned in Chi­na,” said Mandy DeRoche, a lawyer with Earth­jus­tice, which rep­re­sents clients explor­ing how to chal­lenge local min­ing operations.

“And we’re con­cerned about the direc­tion it’s going.”

In 2021, Chi­na severe­ly restrict­ed bit­coin min­ing, lead­ing many firms to relo­cate or expand their US presence.

Ear­li­er in the year, Demo­c­rat law­mak­ers asked pub­licly trad­ed bit­coin min­ing com­pa­nies to reveal what ener­gy they use.

Envi­ron­men­tal groups say the industry’s envi­ron­men­tal record, ener­gy usage and long-term impact on com­mu­ni­ties have large­ly been hid­den from scrutiny.

Friday’s report high­lights cas­es where bit­coin min­ers have pro­longed the life of fos­sil-fuel plants, pushed up elec­tric­i­ty rates, strained pow­er grids, and fall­en short on promis­es to the local community.

Some min­ers say they ben­e­fit ener­gy grids by pro­vid­ing sta­bil­i­ty and financ­ing to renew­able pow­er generation.

In Texas, some min­ers have inked deals with renew­able ener­gy providers and signed up for flex­i­ble usage to smooth demand.

Oth­ers brand them­selves as green; pub­licly trad­ed CleanSpark says its ener­gy is more than 96pc carbon-free.

“It’s not just that min­ers can be more effi­cient and use clean ener­gy for their oper­a­tions,” said Zach Brad­ford, CEO of CleanSpark. “But that bit­coin min­ing can actu­al­ly has­ten the low-car­bon ener­gy transition.”

But in Ken­tucky, bit­coin min­ing has moved in the oppo­site direc­tion, said Lane Bold­man, exec­u­tive direc­tor of the Ken­tucky Con­ser­va­tion Com­mit­tee, an envi­ron­men­tal group.

A lot of these oper­a­tions are going to be prop­ping up bad or dirty ener­gy projects — that’s exact­ly what hap­pened here, she said.

The report also exam­ines what it says are the industry’s unfound­ed envi­ron­men­tal claims.

Those include a reliance on car­bon cred­its or renew­able ener­gy “off­sets” — tac­tics that the Sier­ra Club’s Fish­er said aim to hide the true impact of cryp­to min­ing on the climate.

“There’s a lot of green­wash­ing going on, he said.

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