Matteo Benetton is an economist at the Hass School of Business at the University of California, Berkeley. In places with fixed electricity supplies, operations can cause shortages, rationing, and the like. There are social costs to mining in places with access to power, such as upstate New York.
Across the country, these impacts are being felt. Benetton says there are strong profit incentives to keep as many server running as possible, and he is now calling for greater transparency in these companies. That is not a popular opinion within the industry. Benetton says that if you are doing good, you shouldn't be afraid to reveal the data.
Gary Gensler, chair of the Securities and Exchange Commission, recognizes that there are gaps in regulation. He referred to the industry as the Wild West in a speech.
As long as mining is profitable, Read warns against banning it. When China banned the use of digital currency to reduce carbon dioxide emissions, operations went up in places like Kazakhstan, where electricity comes mostly from coal. A recent study found that the use of renewable energy in Bitcoin dropped by half between 2020 and 2021.
The industry's sheer consumption makes it a significant contributor of carbon emissions.
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Green investments or greater efficiency can't solve the problem. He found in a recent working paper that by the end of the decade, the energy usage of cryptocurrencies will rise by 30%. The rewards of mining increase if the price of Bitcoins goes up. The situation is referred to as the Bitcoin dilemma.
The climate crisis will be made worse by the 32 million metric tons of carbon dioxide coming from upstate New York.
Lois Parshley is an investigative science journalist.
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