Cryptocurrencies are catching flak from environmentally conscientious investors who are claiming that the digital assets are “dirty currencies.”
For example, one private equity company bought a decommissioned coal power plant, converted it to burn natural gas, and used it as a “power plant-cryptocurrency mining hybrid,” the Financial Times reports.
Greenidge Generation Holdings stated that it expects to become “the only US publicly listed bitcoin mining operation with its own power source.” In a presentation to investors, the investment firm revealed says it mines Bitcoins for just $3,000.
Climate activists, however, are dismayed that fossil fuels will be used to promote the mining of cryptocurrencies and are pushing regulators to begin cracking down.
“Bitcoin alone consumes as much electricity as a medium-sized European country,” Professor Brian Lucey at Trinity College Dublin, told the Financial Times. “This is a stunning amount of electricity. It’s a dirty business. It’s a dirty currency.”
According to Cambridge University’s Bitcoin Electricity Consumption index, Bitcoin mining consumes 133.68 terawatt hours a year of electricity, a number that has risen consistently for the past five years. To put this in perspective, Sweden saw 131.8TWh of electricity usage in 2020, while Malaysia utilized 147.21TWh of electricity.
Tesla’s chief executive Elon Musk has gone so far as to rescind his plans to use Bitcoin for Tesla vehicle payments, claiming that “cryptocurrency is a good idea on many levels and we believe it has a promising future, but this cannot come at great cost to the environment.”
In a bid to help cryptocurrencies go green, a group of crypto-miners said they’re considering the sale of “green Bitcoin,” selling coins through transactions that are verified on the blockchain by computers powered only by renewable energy, Bloomberg reports.
“There’s a market that doesn’t know it yet,” Sheldon Bennett, chief executive officer of crypto miner DMG Blockchain Solutions Inc, told Bloomberg, adding that his firm has had discussions with “multiple banks and financial institutions” that want to buy Bitcoins that can fulfill increasing demand for ESG compliance.
“More and more, they are saying if there’s an option, I am willing to pay a premium to get it,” he added.