Bitcoin, and cryptocurrency in general, has seen a sharp rise in value and public attention since the early 2010s. As a result, the cost of bitcoin has soared, with the current valuation hovering around the $43,000 range.
Bitcoin was founded in 2009 by Satoshi Nakamoto as an opportunity to decentralize banking institutes and put more power into consumers' hands. The tender had a slow start filled with many critics predicting its inevitable downfall. However, these critics were quickly proven wrong. Cryptocurrency, and bitcoin specifically, have grown so large since then that governments around the globe have begun taking an interest, whether for better or worse.
Just last year, El Salvador was the first country in the world to declare bitcoin an official legal tender. On the flip side, the state of New York has recently attempted to ban bitcoin mining, with one of the reasons being its vast environmental footprint.
The Discord Surrounding Bitcoin
Before discussing Bitcoin's environmental footprint, we first must understand how the tender is mined.
Bitcoins are introduced to people, known as miners, to confirm their legitimacy and enter it onto the blockchain, a digital public ledger holding verified bitcoins. These miners utilize multiple computing systems to solve complex problems "in a process known as 'Proof of Work' (PoW). The process is named such because only participants (miners) who have proven they've dedicated sufficient resources (work) will have a chance at winning the rewards."
After this work, some miners are rewarded with newly minted bitcoin if they are the first to solve the problems.
In theory, the process of creating a bitcoin and entering it onto the digital ledger sounds relatively simple. Nevertheless, this procedure is entirely complex, can take hours, and requires a great deal of energy, hence the large environmental footprint.
According to Princeton University, the annual carbon footprint of this crypto in the United States is equal to that of the entire country of Denmark. Additionally, the coin's energy consumption has also risen drastically due to increased interest, from "9.6 TWh (terawatt-hours) in February 2017 to 73.2 TWh in January 2020." In short, just one bitcoin transaction utilizes enough energy equivalent to power a United States residential home for up to a month.
As a result, some individuals and government officials have criticized bitcoin for its footprint when climate change remediation is a goal for many.
On the flip side of this argument lies those in favor of bitcoin and cryptocurrency, who claim it is a result of seeing the bigger picture of what bitcoin could help society achieve; a peer-to-peer currency that can effectively decentralize the banking system in the United States. Further, when considering the banking system's massive footprint, decentralizing it could potentially make crypto the least energy-intensive option in comparison.
Some miners have been looking to lower their footprint by a few different methods that typically focus on alternative energy usage to supply their computing systems. One such case can be seen with Stronghold Digital Mining, which uses coal byproducts to generate electricity.
Setting the Standard
Stronghold Digital Mining is a unique company in the field as they market themselves as being "the environmentally beneficial and vertically integrated Bitcoin miner."
The mining company claims this title due to their coal reclamation program that they say can effectively restore local ecosystems while producing energy to power bitcoin mining. Stronghold removes coal refuse "from piles and burn it in an emissions-controlled manner at our wholly owned generation facilities."
Coal refuse is byproducts leftover throughout Pennsylvania due to past coal mining. They can cause air pollution and pose a risk for ecosystem damage. Stronghold claims that their method of removing the coal refuse and restoring the previously mined land helps to remove these adverse risks and produce energy.
The company isn't the first to dapple in coal refuse, as the byproduct is considered a "Tier II alternative energy resource" in Pennsylvania. The Environmental Protection Agency also released a statement on the matter calling coal refuse power plants an "important source of reliable energy, a key economic driver in the rural communities where they are located, and a proven method for turning waste into a usable source of power."
Further, a study conducted in 2020 in China labeled fires that result from untreated coal refuse's a "serious health, safety, and environment hazard."
All in all, though Stronghold's energy source has yet to reach mainstream awareness, it does have the potential for bettering the environment in a few different ways. Therefore, the company is working to remove hazardous waste from the local ecosystem while powering their mining can be highly beneficial, not only for the safety and health of the environment but also to relieve pressure from the U.S. electricity network.
The company's website claims that its restoration program allows for the effective removal of 99.9% of particulate and mercury emissions, 90% of nitrogen oxide emissions, and 98% of sulfur dioxide emissions. It also states that their two Pennsylvania-based plants are currently working on this coal refuse project.
Regardless, their innovative approach to bitcoin mining can help lower their footprint and remove hazardous materials throughout Pennsylvania. Moreover, it shows that there is a great deal of nuance and opportunity within cryptocurrency.