I am on record as not being a big fan of cryptocurrency (or at least I am now), as I tend to be wary of products that have no actual function. What’s worse, I’d been reading reports like this that says Bitcoin alone is the 23rd highest energy consuming nation in the world and that the Ethereum network surpasses Costa Rica annually in energy consumption. As someone predisposed to dislike this stuff, that would be enough for me to write it off, but my tech friends of late have been inundating me with articles about how blockchain transactions are becoming greener, so at the very least supporters of crypto and NFTs are aware of the environmental criticisms and are seeking to course correct. 

The main environmental issue for any blockchain transaction is the “Proof-of-Work” consensus protocol (PoW)that verifies transaction blocks, which requires a lot, and I mean a LOT, of computation power from a network of high end computers called “miners”, a term that you’ve probably heard of before. Some networks are claiming to be going greener with an alternative “Proof-of-Stake” consensus protocol (PoS) which works by “assign[ing] voting privileges to cryptocurrency owners. As the name suggests, users have to ‘stake’ their cryptocurrency holdings to vote on the legitimacy of new transactions.” The security and efficiency of this model are baked into the design, namely because confirmations are staked with users’ own money, they stand to lose that collateral if it turns out to be fraudulent, and because of its honor system, transactions move quicker than all the computational hoops of PoW. However, is it really cleaner?

A PWC report found that the Tezos network “with over 50 million transactions in 2021 had an average carbon footprint of 17 world citizens” which is certainly better than surpassing an entire nation. In addition, the company Algorand claims that their PoS network is entirely carbon neutral. I would also be remiss if I didn’t mention that none of this minutia would be necessary if the world operated on a zero carbon grid, something that is technologically possible, but logistically nightmarish. I was also linked a twitter thread that explains some of the ways in which blockchain is used to promote greener living through sustainable supply chain management, and new kinds of incentive structures. So yes, the case has been made to me that blockchain in energy can be used to accelerate the green revolution while being run on relatively low pollution or carbon neutral PoS networks. 

That being said, if we take the initial question about cryptocurrency and NFTs specifically, I’m still not sold. First of all, Bitcoin, the largest cryptocurrency, has no intention of moving away from their Proof-of-Work protocol anytime soon, and a reminder, they are the 23rd highest energy consuming nation in the world. Furthermore, the lack of actual use for cryptocurrency beyond reckless speculator investment and novelty, or NFTs, which are mostly just a proof of concept for blockchain and nothing more, means that we’re adding this energy burden for NO REASON. Crypto has existed since 2009 and NFTs since 2015. At a time when it has become clear that we need to reduce emissions drastically worldwide to avoid climate catastrophe, I’m sorry but it’s irresponsible to be pumping any extraneous CO2 in the atmosphere just on the promise that it might mean something in a few decades. There are better use cases for blockchain, and if we honestly want this technology to be a part of our lives going forward, we need to look beyond the novelty of crypto and NFTs and, like all tools, find the uses that can do the most good.