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How Our New Crypto fads are Killing Our Planet
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How Our New Crypto fads are Killing Our Planet
  • Lee Min-Hyeong
  • 승인 2022.04.29 09:43
  • 댓글 0
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▲ A series of NFTs called ‘Pudgy Penguins’ (source=coindesk korea)
▲ A series of NFTs called ‘Pudgy Penguins’ (source=coindesk korea)

 

 Fifty-six million won. This is how much Bitcoin is worth today after it took the world by storm. This once-obscure digital token is now one of many virtual currencies in our world along with others such as Dogecoin and Ethereum. The newest commodities in the crypto market are called NFTs, which are crypto-artworks that are created and traded online, such as 'Pudgy Penguins' in the picture above. They might appeat harmless, but it has been revealed that crypto commodities and cryptocurrencies has a glaring flaw that affects the entire planet.

 Crypto commodities utilize a form of technology called blockchain. Blockchain technology is technology that stores information as numerous connected chunks called blocks. These chains of information are designed to be unable to altered by someone else. Adding a block of information to the chain is called ‘crypto mining’, which is done by ‘miners’ who do the work for pay.
 In cryptocurrencies, blockchain records transactions in order to verify peoples’ ownership as well as the currency's legitimacy. It can be compared to a digital account book or receipt. When A sells bitcoin to B, for example, crypto-mining is what is done to register that A had sold B a bitcoin to the blockchain of that bitcoin that proves that B owns the bitcoin. This is how NFTs work as well, just for artworks instead of currency.

▲ Carbon footprint, energy and electronic waste caused by Bitcoin (source=digiconomist.net)
▲ Carbon footprint, energy and electronic waste caused by Bitcoin (source=digiconomist.net)

 However, crypto mining is an incredibly energy-consuming process. According to research from Statistica, Trading one bitcoin consumes 2258 kilowatt-hours of energy. K-indicator’s statistics say, the average Korean uses 26.8 kilowatt-hours of energy every day. This means that a single bitcoin transaction consumes enough energy to power a 4-people household in Korea for more than 21 days. The Bitcoin energy consumption index from Digiconomist shows that Bitcoin alone consumes 204.5 terawatt-hours, which is 204.5 trillion kilowatt-hours. This is more annual energy consumed than the entire country of Thailand, which is the 22nd most energy-intensive country among OECD countries. These statistics are only regarding Bitcoin, and countless cryptocurrencies are unaccounted for in this data, meaning the overall negative environmental impact of blockchain technology is much higher than the data presented above. This has turned numerous people against blockchain technology. Tesla CEO Elon Musk, a once avid supporter of crypto, stated that Tesla will no longer be accepting Bitcoin as payment, saying "Cryptocurrency is a good idea... but this cannot come at great cost to the environment.".

 Faced with this criticism, some cryptocurrency companies have announced that they will be changing their systems to a less energy-intensive one. The current blockchain model used by most cryptocurrencies is called Proof-of-Work (PoK), which is a system where miners compete against each other to do the work faster, the fastest one getting paid. This system is widely used and consumes an exorbitant amount of energy. The newer one, Proof-of-Stake (PoS), is much less energy intensive. Pos assigns the mining to so-called validators, who are people who have offered their cryptocurrencies as collateral for a chance to mine for payment, This means only one computer solves one transaction, which means less miners are working on one transaction, saving wasted energy.

 However, progress is slow. Ethereum, one of the biggest cryptocurrency companies in the world has announced that they will be changing to PoS, but have not shown any signs of progress for years. Bitcoin, arguably the biggest cryptocurrency in the world, already has an established system based on PoW, which, according to experts in economy, makes the prospect of Bitcoin switching to Proof-of-Stake highly unlikely. This new method is also falling under criticism due to the lack of data proving how much energy it consumes. Pete Howson, a senior lecturer in International Development at the University of Northumbria, said in an interview with Euronews Green, said “We may be heading in the right direction but while payments in cryptocurrencies are still being accepted, it's not an easy problem to fix.”.

 The Doomsday Clock, a clock portraying humanity’s lifespan as 24 hours, decided by experts all around the globe, is currently 100 seconds till midnight. Scientists say that humanity may become extinct if the temperature of the Earth rises by 2 more degrees. The point of no return for our environment is closer than we realize. People jumping into the ‘crypto-trend’ looking for profit are consuming immense amounts of energy every trade, killing our planet even faster. When internet searches for NFTs and Bitcoin only result in stocks and trading sites, not many know the price we pay for this new trend. If everything continues as is, this path to fortune may become the path to humanity’s grave.  
 


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