Cryptocurrency’s Energy Consumption Problem
Discussion
"By Samuel Huestis:
Cryptocurrency has an energy consumption problem. Bitcoin alone is estimated to consume 127 terawatt-hours (TWh) a year — more than many countries, including Norway. In the United States, cryptocurrency activity is estimated to emit from 25 to 50 million tons of CO2 each year, on par with the annual emissions from diesel fuel used by US railroads.
Decarbonizing the crypto industry thus remains essential to achieving a safe climate future. Yet, while RMI is proud to have played a role in initial decarbonization efforts in the crypto industry, moving forward, we will focus on decarbonizing the grid rather than crypto transactions."
(https://rmi.org/cryptocurrencys-energy-consumption-problem/)
Status
Samuel Huestis:
"As exorbitant electricity consumption from crypto mining became a public concern, RMI’s first step was to act as a co-convener of the Crypto Climate Accord (CCA), along with our partners Energy Web, the Alliance for Innovative Regulation (AIR), and the World Economic Forum. The CCA serves as a “private sector-led initiative focused on decarbonizing the cryptocurrency and blockchain industry,” where solutions and technologies for crypto decarbonization are created collaboratively among players across the web3 and crypto space.
As part of the CCA, RMI spearheaded the development of the CCA Accounting Guidance, a foundational guide to allocating emissions for the crypto industry. The guidance highlights the importance of a consequential accounting approach and the use of marginal emissions rates as a key to understanding crypto’s emissions impact. The guidance further supports the need to gauge grid impact rather than average emissions when assessing emissions impact.
This initial work was followed by participating in a roundtable during the drafting of the Crypto Climate Impact Accounting Framework, developed by the Crypto Carbon Ratings Institute (CCRI) and South Pole. This framework sought to define a methodology for allocating GHG emissions for crypto transactions and holdings. Because institutional investors hold an outsized stake of the crypto market, allocating emissions for these activities is vital to pressure both investors and crypto industry leaders to change their current practices."
(https://rmi.org/cryptocurrencys-energy-consumption-problem/)
Examples
Samuel Huestis:
Ethereum’s proof-of-stake network
"Ethereum moved to a far less energy intensive proof-of-stake consensus mechanism, reducing that network’s electrical usage by over 99.9 percent. (Here’s a discussion of the difference between proof-of-work and proof-of-stake.) A single transaction on Ethereum’s proof-of-stake network is now similar to the electrical usage of a Mastercard transaction. As a result, when we speak of the emissions impact of “crypto,” we are now largely speaking about the emissions impact of Bitcoin."
(https://rmi.org/cryptocurrencys-energy-consumption-problem/)