Framing Sustainability and Crypto.
Bitcoin has had another year of ups and downs, soaring to new highs only to drop down again back in April. This time the drop wasn’t sparked off by some news of a crackdown in China but by a single tweet by everyones favourite billionare.
Not delving any deeper into the more “financial” reasons as to why Tesla might have stopped accepting Bitcoin or even why they bought them in the first place, I want to concentrate more on how we frame sustainability.
Bitcoin mining is using a lot of energy. If all that energy is produced by carbon-intensive methods, then Bitcoin mining has a harmful impact on the environment. It’s estimated that its energy consumption will continue to grow as long as the profitability can be maintained and if we assume that the price of Bitcoin continues to go up at its current exponential rate, Bitcoin mining will remain profitable for the foreseeable future. If looked at in isolation then yes Bitcoin’s environmental impact needs to be dealt with and fast, no argument here.
Looking at it in isolation though, might lead us to ignore some far more impactful industries. Why is it, that we hold Bitcoin miners to a higher standard than other industries?
Yes, every industry should strive to reduce its carbon footprint as much as possible, but I don’t see why we are focusing on one of the least harmful industries, particularly in comparison with other heavy carbon emitters such as manufacturing, aviation, transport and actual metal mining.
A good comparison to Bitcoin mining’s energy consumption would be the gold mining industry,. Both industries work within the same framework and in a sense fill the same value proposition, both producing a commodity meant to be a store of value. Conceptualizing the environmental impact of an industry that has a similar value to the economy, meaning what it brings to the table, would give us a better idea of where Bitcoin mining sits on the sustainability spectrum. If we start looking at things through this lens, then the environmental impact of Bitcoin mining seems small by comparison.
Below i give just a small list of examples of the devastation that is industrial-scale gold mining, and you will quickly see that by comparison Bitcoin mining maybe it shouldn’t be our priority.
Industrial mining uses large quantities of sodium cyanide, which is extremely toxic to the environment. In North America and many parts of the world, mining is the largest source of contaminated solid waste in the environment. Artisanal small-scale gold mining is still the largest source of mercury pollution on earth, ahead of coal burning. The US Environmental Protection Agency has reported that 40% of watershed headwaters in the western United States have been contaminated by mining operations. There are, overall, roughly 500,000 defunct metal mines in 32 western states that the EPA has plans to clean up. Remediation of these sites may cost more than $35 billion. A gold mining boom is accelerating the destruction of the Amazon rainforest, a biologically diverse ecosystem that acts as a check on global warming. Artisanal, or small-scale, gold miners are tearing down the forest to access the rich gold deposits beneath.
I feel I need to underline here that if we lived in a perfect world every company would strive for the least environmental impact they could, but in reality that doesn’t happen unless the public and by extension governments exert some pressure. Am also not saying that we shouldn’t let Bitcoin Miners of the hook. Ideally, we would exert pressure collectively by prioritising the most harmful industries.
The problem is, that for the time being that pressure is being exerted selectively and based not on the actual environmental impact of an industry but by how prevalent they are in the public sphere at any moment in time.
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