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Earthjustice is a nonprofit in the business of building a better future. We’re here because the earth needs a good lawyer.

Some Cryptocurrencies Are an Environmental Disaster. It Doesn’t Have to Be This Way.

As cryptocurrency attracts wider attention, the environmental impacts of the underlying technology around some of these currencies is rightly raising concerns. The climate crisis requires that every industry reduce its energy consumption and carbon pollution as much and as quickly as possible. The energy demand from cryptocurrency, specifically cryptocurrency created through the “proof-of-work” method, is threatening our pathway to decarbonization and zero emissions.

How is cryptocurrency created?

  • New digital coins are generated or “mined” through a network of computers that create a secure currency system without a centralized authority regulating it. Cryptocurrencies are created by verifying transactions between users using blockchain technology.
  • The most common process is known as “proof of work.” The popular cryptocurrency bitcoin is an example of a currency that relies upon the proof of work method of validation.
  • Proof of work sets up a global competition between massive computer arrays to solve a mathematical puzzle first; the winner gets newly minted coin as payout and the overall system gets validation of recent transactions. The difficulty of the puzzle increases over time and as more computing energy is thrown at the problem.
  • Proof of work isn’t the only way to validate cryptocurrencies. Other methods, such as the proof-of-stake methodology, utilizes over 99% less energy than proof-of-work mining by randomly picking a winner from among those who have coins, proportional to the amount they temporarily contribute or “stake.”
  • Other less energy-consumptive methods include proof-of-authority, open representative voting, federated consensus, proof-of-activity, and proof-of-burn.

In a nutshell, the proof-of-work system trades computational power — energy — for new currency. Other methods require less energy consumption.

What’s the impact?

  • Following China’s ban on cryptocurrency mining in 2021, the United States is now home to the largest cryptocurrency mining operations in the world.
  • Miners are capturing fossil-fuel burning power plants in New York, Pennsylvania, and Montana.
  • The mining runs 24 hours a day, 365 days a year, emitting millions of tons of greenhouse gasses that would not have been otherwise emitted.

Current estimates put the electricity demand from bitcoin alone on par with countries like the Netherlands.

Coal plants that were operating very little or planned for closure are now being revived and solely run to power massive proof-of-work mining operations. Gas plants are also now being dedicated to this purpose at a time when the transition away from coal and gas to renewable energy is critical to averting the worst of the climate crisis.

What is Earthjustice doing?

  • On May 9, 2022, over 50 groups around the country submitted comments to the Biden administration to address the harmful impacts of proof-of-work cryptocurrency mining in their localities. Earthjustice supported other national public interest groups in calling for federal agencies to study the climate and energy impacts of proof-of-work mining.
  • Earthjustice is challenging permits at one of the earliest crypto-captured power plants, the Greenidge power plant on New York’s Seneca Lake.
  • Greenidge was once a retired coal-fired plant that sat dormant for six years. Investors bought it, repurposed it to burn gas, and it now runs 24/7 to operate 15,300 computers for proof-of-work mining — vastly increasing its climate-warming emissions, local air pollutants, water pollution, noise pollution, and electronic waste.
  • Earthjustice is supporting communities surrounding the power plants in Dresden and North Tonawanda, New York and Hardin, Montana as they fight cryptocurrency mining operations planned there.
  • Earthjustice is also calling on New York Governor Kathy Hochul to institute a moratorium on proof-of-work mining until its environmental and energy impacts can be studied.
A bitcoin mine

Proof-of-work mining operations like this one near Seneca Lake, New York, require significant energy to power large numbers of computers.

GREENIDGE GENERATION