Crypto crash unlikely to reduce its climate impact, expert says

theguardian.com:

The crypto crash will not reduce the sector’s climate impact any time soon, an economist has warned, even though the environmental footprint of digital currencies is in theory set by their market value.

“Unless bitcoin collapses further, there’s no reason to expect a decrease in environmental impact,” said Alex de Vries, a data scientist at the Dutch central bank and the founder of Digiconomist, which tracks the sustainability of cryptocurrency projects.

His research shows that while the increase in a cryptocurrency’s price encourages more computer capacity to be dedicated to it – increasing carbon emissions – that capacity takes a long time to disappear after the value declines, so the climate impact persists.

Cryptocurrencies work by validating their transactions through huge numbers of “miners”, who use their computers to solve extremely complex maths problems in exchange for the chance of getting tokens as a reward, in a highly energy-intensive process.

De Vries estimates that the bitcoin network uses about 204 terrawatt-hours (TWh) of electricity per year, around the same as the energy consumption of Thailand and above that of all but 23 sovereign nations.

Other cryptocurrencies add to that footprint: ethereum, the token that underpins the NFT boom and the “decentralised finance” sector, has an annualised footprint of around 104TWh (equivalent to Kazakhstan, more than all but 34 nations), while even dogecoin, a lighthearted spinoff of bitcoin famed for its community’s positive attitude, consumes an estimated 4TWh annually.

Those figures have barely changed over the past month despite $1tn being wiped off the crypto sector, and other measures of the amount of processing power devoted to “mining” similarly show little