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Bitcoins are created or “mined” when people use sophisticated computer equipment to solve complex mathematical problems. The first person to solve a problem earns a Bitcoin and the process begins anew.
The problem: all that computer power burns huge amounts of electricity.
Mining one Bitcoin, now worth about $46,000, takes about $12,000 worth of electricity, as much as a typical U.S. household uses in nine years, as calculated last August by the U.S. Energy Information Administration.
Globally, mining Bitcoin uses as much electricity annually as the U.S. state of Washington or the entire country of Norway, according to the Cambridge Centre for Alternative Finance.
Generating and burning all that power creates as much air pollution as the nation of Greece, a study by CNN Business found.
Now a coalition of environmental groups, including Greenpeace USA and the Environmental Working Group, is producing a series of public service ads highlighting Bitcoin’s environmental detriment and advocating a change to mining methods to reduce the industry’s greenhouse gas emissions.
The ads will run in the WSJ, New York Times, Politico, and other venues and are targeting prominent Bitcoin backers including Elon Musk, Twitter founder Jack Dorsey, and Fidelity Investments CEO Abby Johnson.
The group aims to persuade the Bitcoin world to abandon its so-called “proof of work” mining method and consider alternatives such as the “proof of stake” model that the Ethereum network is adopting.
In “proof of work,” miners compete to earn digital coins by using vast computing power, and electrical power, to solve complex mathematical problems.
In “proof of stake,” miners are not required to burn power to earn crypto; instead, miners put up a stake of digital coins to claim the right to acquire more.
The switch to proof-of-stake is expected to cut the Ethereum network’s electricity use by 99 percent, according to the Wall Street Journal.
The Crypto Climate Accord, another attempt to lower crypto’s energy appetite, has enlisted about 250 companies to switch to renewable sources of power and “will deliver the crypto industry an open-source toolbox of tech solutions,” it has promised.
The accord’s progress has not been fast enough to satisfy the new coalition of green groups.
“You can’t ignore that we’re in a climate emergency,” Michael Brune, the Sierra Club’s former executive director, said in comments quoted by the WSJ.
“It’s important for anyone in a position to act, to act,” he said.