Short Wave - The Environmental Cost of Crypto

Episode Date: April 26, 2022

Cryptocurrencies may exist only in the virtual world, but their impact on our natural resources is huge. That's largely because the technology underpinning crypto is an energy vampire that devours more electricity than do many countries. But that's only part of the story.Short Wave Host Aaron Scott talks to Producer Eva Tesfaye about the many environmental impacts of crypto - beyond its strain on energy - and what various local, state and national governments are doing about it. Check out Short Wave's previous episode about how cryptocurrency works and why its technology sucks up so much energy here: n.pr/3ETHXVq Email the show at [e-mail] pcm.adswizz.com for information about our collection and use of personal data for sponsorship and to manage your podcast sponsorship preferences.NPR Privacy Policy

You're listening to Shortwave from NPR. Aaron Scott, are you ready to talk about crypto some more? Born, ready, shortwave producer, Eva Tesfai. So yesterday we talked to Planet Money's Alexei Horowitz-Gazi. He explained what cryptocurrencies are, how blockchain technology works, and why that technology requires a massive amount of energy. And then we looked at one possible way of changing that technology, so it requires far less energy.

And today on the show, we're going to get deeper into the environmental impacts and what various local, state, and national governments are doing about it. I'm Eva Tesfai. And I'm Erin Scott, and you're listening to Shortwave, the Daily Science Podcasts from MPR. So, Eva, yesterday we talked about one way to reduce the amount of energy that blockchain technology uses is to switch from a method that's energy intensive called proof of work to one that uses far less energy called proof of stake. But what about just switching? to renewable energy to run all the computers. They can totally do that.

For example, there's a lot of crypto miners in Chelan County, Washington. They were drawn to the area over the past few years because it has cheap hydroelectric energy from the Columbia River basin. That sounds great. However, I sense a butt coming. Yeah, so the energy is renewable, but the county still had to figure out what to do with these miners who needed large amounts of energy.

Like, at one point the requests for energy from crypto mining totaled more than three times the amount of energy used to power the entire county. Yikes. And it's not just electricity. I spoke to Pierce Greenberg. He's an environmental sociologist at Creighton University. He published a paper about Chelan County and crypto boom towns, as he calls them.

They're scattered throughout rural America. I think people are right to be skeptical about whether this is a responsible use of our natural resources in terms of primarily electricity and energy, but also water. Some of these facilities can consume millions of gallons of water to cool the servers that are doing the mining, and also, you know, they require land to place these mines on. So energy use and carbon emissions are not the only environmental impact. Yeah, I mean, another that I hadn't considered before is noise pollution. One small Appalachian town, Limestone Tennessee, used to be quiet and idyllic.

But ever since Red Dog Technologies opened a crypto mining center there, residents have complained about the noise from the giant fans that are used to cool the computers. I'm going to play you the sound from a news report from the TV station WAT so you can hear what it sounds like. Yeah, that sounds like being on the tarmac standing next to an airplane. That's what one of the residents said, that it sounds like a jet engine in their backyard running 24-7. And they also worry about how that's affecting nearby wildlife. These are issues other crypto boom towns are experiencing as well. And then what about the actual physical servers? Like these are computers which require a lot of different materials, including rare earth metals.

And those things require mining and other energy-intensive processes to assemble. and then there's the question of e-waste when the computers have hit the end of their crypto mining road. So like if the people who are running these centers are not recycling all these servers and computers properly, they're potentially putting out a lot of toxic chemicals and heavy metals that might end up in the air, water, soil of the community. Yeah. So one study estimates that Bitcoin creates more than 30,000 metric tons of e-waste annually. That's close to what countries.

like Uganda, Lithuania, or Qatar produced in a year. Wow. I'll also add that pinning down cryptocurrencies environmental footprint is really difficult because it's so decentralized. So all these numbers are estimates. Okay. So what did Chalang County end up doing about all the crypto miners there? So basically they ended up setting a different price for cryptocurrency miners,

which seemed to keep the energy requests at a manageable level. But yeah, I think what happened there is really important, because we're going to see a lot more crypto boom towns, especially since China banned cryptocurrency and transactions entirely back in 2021. Whoa, whoa, whoa. They banned mining and transactions entirely? Yep, because of the environmental costs and also because the Chinese government worries that crypto could disrupt its financial system and could help conceal criminal activities.

A bunch of other countries have either done the same or placed restrictions on cryptocurrency. So what happened? Did all those miners in China stop? Nope. Many of them relocated to Kazakhstan and the U.S. That means there's been an influx of even more miners into those rural parts of the U.S., places like Chelan County and limestone, Tennessee. And one city found that China's crackdown has made Bitcoin mining dirtier overall because the energy resource they use in Kazakhstan is mostly coal, whereas in China they were using hydropower for part of the year. during the rainy season. So China banned crypto outright, which is a drastic step that impacted crypto markets worldwide.

Is the U.S. considering doing anything about crypto's environmental impacts here? So the U.S. House Committee on Energy and Commerce is starting to take a look at this. This is Representative Diana DeGette in a hearing they had on it back in January. You should be sure that as we develop novel and helpful uses for blockchain technology, that we also minimize any resulting energy and environmental impacts. And New York State's Environmental Conservation Committee voted to move along a bill that would place a moratorium on crypto mining until the environmental impact is assessed. So a lot of people are trying to regulate crypto energy consumption.

Okay, Eva, so crypto and other blockchain technology have a huge environmental footprint in large part because they require so many computers running on these big server farms. But it's not like they're alone in that. I mean, all the photos and videos we post to social media, all the files we store in the cloud, all the Zoom calls we make, they all require massive numbers of computers whirring in data centers all over the world. You're so right, Aaron.

It's enough energy to power millions of homes. And you reminded me of something that Pierce Greenberg, the sociologist, said to me that because our online lives and crypto are not physical, it's easy to forget that they have a huge impact on the physical world. They require natural resources. And a lot of them. Thank you for taking us on this crypto road trip, Eva.

Thanks for coming with me. This episode was produced by Eva Tesfi, Stephanie O'Neill with the editor and Catherine Seifer checked our facts. The audio engineer for this episode was Stu Rushfield. Giselle Grayson is our senior supervising editor. Andrew Kisick runs the science desk. Edith, Chapin, and Terrence Samuel are the executive editors and vice presidents of news. And Nancy Barnes is our senior vice president of news. I'm Eva Tess Fye.

I'm Erin Scott. Thank you for listening to Shortwave, the Daily Science Podcast from NPR.