Cryptocurrency is quickly arising as a heavy greenhouse gas emitter, contributing to air and water pollution and threatening New York state goals to reduce carbon emissions. Cryptocurrencies such as Bitcoin are decentralized, virtual currencies that can be used to anonymously send money around the world often preferred as a method of payment in high-crime scenarios. Bitcoin is also a popular investment vessel due to its high demand and liquidity. However, proof of work cryptocurrency mining- the methodology of mining and transaction validation used by Bitcoin, the world’s reigning cryptocurrency whereby supercomputers solve arbitrary and highly complex mathematical problems create more currency- is highly energy intensive, requiring significant amounts of computational power. For context, the carbon footprint of Bitcoin mining is greater than that of the United Arab Emirates and falls just below the Netherlands’.
To fuel their high-energy needs, Bitcoin mining facilities have begun stationing themselves in old or underused power plants, utilizing the leftover energy infrastructure to fuel their high-energy needs. This is problematic in that it emits large amounts of carbon emissions and lacks the positive knock-on benefits of energy that can be outsourced to the grid for public consumption. Instead, the energy produced at these power plants remains largely centralized to private technology companies and their investors.
A reckoning of proof of work-validated cryptocurrency’s energy consumption and greenhouse gas emissions is happening all around the world, including here in New York. In New York right now, Greenidge Generation LLC. is applying for the renewal of a Title V Air Permit, a permit designed to regulate air pollution and cap major sources of emissions. Greenidge previously operated as a fossil fuel power plant, though recently transitioned to a Bitcoin mining facility. The plant is already increasing its carbon emissions, up almost ten-fold in 2020 when emissions were 220,000 metric tons, equivalent to the annual emissions of around 50,000 passenger vehicles. Greenidge is currently approved to emit the equivalent of 641,878 tons of carbon dioxide, an amount greater than when it was operating as a coal plant, threatening emission reduction goals.
Not only are there environmental and public health concerns regarding increased carbon emissions from these cryptomining facilities, but also the potential for the release of other toxic chemicals into the air that may further threaten air quality in nearby communities. These toxic chemicals are linked to negative health impacts including cardiovascular and respiratory diseases. Moreover, the immense computational power required to complete proof of work is predicated on an approximately 1.5-year cycle of burning out old technology and replacing it with newer, more efficient technology. This results in massive amounts of e-waste, comparable to that produced by midsize countries like the Netherlands. There are also potentially negative knock-on effects to local water ecosystems due to water heating and overall water usage in proof of work cryptomining.
Many community groups, labor unions, businesses, and environmental organizations are speaking out against what they see as the negative impacts of proof of work cryptocurrency mining. Groups are currently advocating for Governor Hochul to place a moratorium on proof-of-work cryptocurrency mining and conduct a thorough, statewide Generic Environmental Impact Statement (GEIS) to assess the environmental impact of this industry, a push based on legislation sponsored by Assemblymember Anna Kelles and Senator Kevin Parker. They are further urging the Governor and the Department of Environmental Conservation to deny permits for both Greenidge and Fortistar North Tonawanda Facility, another proposed fossil-fuel plant turned cryptocurrency mining facility in Western New York. Most recently, advocates spoke out at an Assembly hearing on the subject of proof of work cryptocurrency mining late last month.
With all of this action, what seems clear is the growing concern that Greenidge will not be the last power plant flipped to proof of work cryptocurrency mining. As a result, more and more advocates are pushing for New York to entirely halt the conversion of fossil fuel plants into cryptocurrency mining facilities.