Can Bitcoin Miners Go Green? Climate Concerns Fuel Criticism of Cryptocurrencies (UPDATE)

Last Updated on July 9, 2021

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Climate activists have warned about the increased use of bitcoin and other cryptocurrencies. Put simply, the use of the new breed of currencies outside of Central Bank control and sustainable investing are on a collision course.

The problem is in the mining: computers have to perform difficult calculations to bring a new altcoin into the world. The mining activity for bitcoin alone uses 149.63 terawatt hours annually — a figure expected to grow as the mining becomes more difficult (an increase in difficulty built into the basic design). As big companies like Tesla and ’whale’ investors make greater use of the altcoins that the mining operations create.

That figure (149.63) represents a larger energy use than some entire countries, according to the Cambridge Bitcoin Electricity Consumption Index.

Numbers and Arrows

How many carbon emissions are sent into the atmosphere to create that energy in order to create those coins? That isn’t clear, because, as Andrew Ross Sorkin, a finance reporter for The New York Times, says, “nearly two-thirds of all Bitcoin mining is taking place in China” and much of that is happening in regions with coal-heavy power generation.

Meanwhile, in the United States, Greenidge Generation Holdings, a combined natural gas power plant and a bitcoin miner in upstate New York, (in the Finger Lakes) is becoming more the latter than the former in its focus. It is becoming less a power company that makes a crypto-mining use of some of its power, and more of a crypto miner that owns its own power plant.

Greenidge is well aware of the fact that its business model involves carbon emissions, and it wants to do something about that.

Can Bitcoing mining go green? Right now climate activists are at odds with bitcoin miners and crypto enthusiasts. Is there a possible resolution? Bitcoin production may generate between 22 and 22.9 million metric tons of CO2 emissions a year, on an estimate that appeared in the scientific journal Joule. This would put it above the level of emissions from the Kingdom of Jordan.

Bitcoin CO2 Emissons are High
Bitcoin production may generate between 22 and 22.9 million metric tons of CO2 emissions a year, on an estimate that appeared in the scientific journal Joule. This would put it above the level of emissions from the Kingdom of Jordan.

So 1. the mining is increasingly energy intensive 2. it is impossible to track with precision how the energy is generating, but 3. a lot of it is generated in the most carbon-heavy manner available.

This is bound to become a new arrow in the quiver of many who would like to shut the whole asset class down, whatever their actual reasons for doing so.

Getting in on the Growth

As we have observed on this site, it is natural for investors to want to get in on the growth of blockchain technology, and even the coins specifically. But as controversy of the carbon footprints involved increases, and as adherence to the Paris Accord becomes more imperative, it may be well to think especially of investing in entities that are aware of the situation and doing what they can to lessen its conflict with a climate driven agenda.

Accordingly, Greenidge Generation has decided to invest in a portfolio of greenhouse gas reduction projects that will bring its own net footprint to zero.

Likewise, the financial payments company Square founded by Jack Dorsey (also the founder of Twitter) is very conscious of the conflict. It has vowed both “to support companies working on green energy technologies within bitcoin mining” to to scale a “carbon removal portfolio” in order to bring itself to net zero. That is, it will actively remove carbon from the atmosphere in order to compensate for the carbon that bitcoin miners are indirectly putting into it.

Greenidge’s Business Model

If an investor believes in Greenidge’s business model — mining oplus climate mitigation efforts — is it possible to invest in that conjunction?

It will soon be possible to do so quite easily: by buying stock. Greenidge is going to merge with a publicly listed company later this year, Support.com, an IT support provider. Shares will be divided 92-8 in Greenidge’s favor, so that an investment in Support (NASDAQ: SPRT) will be an investment in Greenidge, natural gas plant and all.