Shi Khai, WEI

Posted on Jan 17, 2022Read on

Notes of a Crypto Environmentalist

When I was 13, I became enamoured with the idea of a naturalist lifestyle: I slept on a wooden floor with no bed and no pillow; I took cold showers only; I went vegetarian. Once, I even refused to eat at a party because they only had styrofoam plates.

Today, I am still vegetarian, but I sleep comfortably on a bed in an air-conditioned room. Yet the idea of protecting the environment still rings in my head, and even louder in the media. Especially in crypto, this is still one of the most common criticisms I hear from friends and new acquaintances.

“NFTs are burning the Amazon forest.” ”Bitcoin mining consumes more energy than ______.” ”Do you even care?”

I had a usual set of replies. But they led to more questions, some were just promises, and of course some folks simply refused to believe.

“Ethereum is transitioning to proof-of-stake.” (When? What about Bitcoin?) ”Bitcoin mining uses a lot of green energy.” (How much? What about coal?)

It was only recently that I realised that these questions all had the same root: What is the point of crypto?

Most of us wouldn’t think twice about taking a flight for a business trip, treating ourselves to a meal with imported produce, or switching on the heater/ air conditioning to keep ourselves cozy. So why would you care so much about Bitcoin miners and NFT minters?

Maybe because it’s only for pointless speculation, creating a random currency out of thin air, scamming people with digital art anyone can download. Maybe you don’t use it, you don’t need it, and maybe you even think the world would be better off without it. For many, I find the conversation to be more existential than it is about ASIC chips.

And I agree with you. Mostly. Most people I had this conversation with could live a good life never touching crypto. And indeed there are useless coins and pirated NFTs. 

But there are also those who need Bitcoin or stablecoins to protect their life savings from hyperinflation. Crypto is not about creating your own currency, but non-sovereign neutral currency that nobody can abuse or exclude you from.

There are those who lost their jobs but survived on Axie Infinity game winnings. Crypto is not about extracting value with cheap tricks, but distributing value from platforms collectively created by the masses.

There are also tenacious creatives who could finally make a living on creative work thanks to NFT sales and royalties. Crypto is not about “cashing in” on your reputation, but building proofs of relationships, ownership, and rewarding that shared history.

To these people, crypto was life changing. Maybe it didn’t cross their minds to think about the energy consumed. Or maybe it did. But for some, maybe it was worth it. To some, it is a financial, social, political revolution. And who’s to say what’s the price for that?

So returning from the tangent, for those who actually care, we now address the environmental concerns from the lens of an open community optimising the first version of an engine. While Bitcoin is already set in its ways, Ethereum is far from complete. In 2022, its most anticipated upgrade will retire proof-of-work and rely solely on proof-of-stake for security, reducing energy consumption by 99.95%. Meanwhile, a whole slew of newer blockchains (e.g. Polkadot, Solana, Avalanche, Near, Cosmos) have blazed ahead with nuanced iterations of proof-of-stake, serving millions of users and securing billions in assets. Crypto is a living, breathing mass of innovation.

And even good old Bitcoin is seeing green. Voluntary groups have sprouted, such as the Bitcoin Mining Council, which boasts a 65.9% sustainable power mix in their Bitcoin mining after surveying 33% of the network in 2021, leading to an estimate of 57.7% sustainable energy mix globally. Thanks to Beijing evicting Bitcoin miners, large mining farms dispersed in search of cheap electricity. Even more thankfully, significant clusters found refuge in wind, hydro, nuclear-powered states like New York, or in flared and stranded natural gas which reduces greenhouse emissions, like in Texas. Turns out you can feed the energy gluttonous Bitcoin with excess greens, improving the economics of renewables, which may even incentivise building more of those plants!

I wish I could just point to this article anytime someone brings up the crypto environmental issue from now on, but the truth is, I probably won’t. By then, things would have changed - Ethereum may have migrated, Bitcoin’s mix may shift again. And besides, just as how each of us finds our own value in crypto, and contributes in our own way, I hope you too, fellow environmentalist, find your story in Web3.