ARTS, HUMANITIES & SOCIAL SCIENCES The Climate Cost of Cryptocurrency Brian Lucey, Professor of International Finance and Commodities, looks at the environmental impact of cryptocurrency and the latest research in the Trinity Business School. Are cryptocurrencies environmentally sustainable? In 2014, Greenpeace stopped accepting donations in cryptocurrencies. Bitcoin, to name one such, consumes incredible levels of energy. In 2019, China provided 75% of the global energy used to extract bitcoins, through its abundance of cheap coal but it has now largely banned cryptocurrency mining. Locating bitcoin ‘mines’ beside actual coal mines has proven profitable. Cryptocurrency companies looking for cheap fuel are purchasing struggling ‘zombie’ coal plants and power stations. In 2020, a bitcoin mining company, Marathon, became the sole recipient of a Montana coal mine which was due to close. In the first 9 months of its operation under Marathon, the mine expelled 5000% more carbon dioxide than the previous year - while producing around 34 bitcoin a day. Bitcoin, on its own, currently consumes more electricity than Norway’s population of 5.3 million people. In the US alone, Bitcoin mining produces 40 billion tonnes of carbon dioxide. Mining bitcoin is exponentially damaging to the environment. A decade ago, a home computer could mine bitcoins but more competition means that it has become increasingly difficult to obtain bitcoins and as a result, larger and more powerful mining machines are required to validate the digital currencies. The puzzles that computers must solve to validate bitcoin have also become more difficult as more compete to mine bitcoin. Even worse, the quantity of bitcoins awarded for solving the puzzles that validate bitcoin is halved approximately every four years or so. Which means that the carbon emissions to produce a bitcoin are doubled. If cryptocurrency is indeed our financial future – and the jury’s out – we will have to work out, as a matter of urgency, ways of reducing its carbon footprint. Professor Brian Lucey, who supervises seven PhD students, is part of a wider team examining the whole area of cryptocurrencies that includes people from the Luiss Business School in Rome, the University of Reading and the University of Southhampton, as well as colleagues in Pakistan and Australia. One of the most interesting concerns people have is around the energy footprint of cryptocurrencies, which is very large. By some metrics, the mining of bitcoin users
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