Ideally, I would have literally no idea what a Bitcoin is. I’d see the word occasionally, and shrug it off as really not worth reading about. Sadly, it has become extremely relevant to the issue of climate and energy.
Because creating units of this digital currency is – by design – incredibly energy intensive, it has become a major player in the machinations and politics of the energy transition around the world. My argument is that it is a clear force for bad. Its advocates flick between either arguing that it really is a force for good, or that climate change is a hoax so it doesn’t really matter.
Recently, there have been rising efforts to formalise the process of pretending that Bitcoin mining is somehow beneficial for climate change or the environment, with a Bitcoin Mining Council promising to “counter misinformation,” and a Central American regime claiming that pre-existing geothermal developments are actually being built due to Bitcoin mining.
The latest episode in this broader process of trying to present a verifiably dirty industry as if it’s not only clean but vital to clean power around the world is particularly bad. This involves a Bitcoin mining company in Pennsylvania using a substance known as “waste coal” to generate electricity, to power their computers.
Coindesk, a US-based Bitcoin media outlet, was among many (many) such outlets heralding a company known as Stronghold Digital Mining raising a cool $105 million USD to “turn waste coal into Bitcoin”. Stronghold happily claims that what they’re doing is a net environmental benefit.
This is because coal waste – a toxic by-product of burning coal for power or digging it up – causes extreme environmental damage when it’s simply left in massive piles. It’s made up of coal, rocks and and soil, and in countries like America it can leach toxic chemicals into waterways and soils.
Stronghold Digital Mining, a bitcoin and cryptocurrency miner that uses waste coal to power its operation, has raised $105 million from investors to build out its mining business. By: @BillyBambrough https://t.co/wB4ixfeHxW
— Forbes Crypto (@ForbesCrypto) June 22, 2021
Though they essentially present themselves as a land remediation company, one important component of their environmental impact is essentially ignored: when you burn waste coal for power, you create greenhouse gas emissions. In reality, they are simply converting one type of environmental harm into another, and pretending as if they’re solving the problem.
It is, in fact, relatively easy to find out how carbon intensive this process is – not only this specific plant but America’s ‘waste coal’ plants and other coal plants, in general.
The Energy Information Administration publishes pollution data frequently, and it’s clear that in terms of the levels of carbon dioxide produce, this Bitcoin plant is incredibly emissions intensive. Relative to the US’ other “waste coal” plants, Scrubgrass emits more carbon dioxide per unit of electricity. And relative to other coal-powered electricity generators, it’s worse still.
Even among the country’s various waste coal plants, Scrubgrass is relatively more emissions intensive:
And, of course, sulfur dioxide and nitrous oxide (SO2, NOx) emissions are high for waste coal, too, relative to other coal plants and other power plants in the US. In 2019, Scrubgrass emitted 543 tonnes and 266 tonnes of SO2 and NOx respectively.
There is a deeper problem at hand here. Bitcoin miners are often finding forms of “waste” energy – really, the outcomes of horrendously unregulated and inefficient and polluting forms of energy extraction and generation – and pretending that using these “waste” byproducts is somehow an environmental benefit.
A clear example is the use of otherwise vented or flared gas from the fracking process, something which should have been regulated out of existence well before the Bitcoin folks came along.
If extremely wasteful and environmentally damaging processes can be monetised instead of regulated, that becomes an incentive to continue to keep that process unchanged.
Unfortunately, the problem of Bitcoin mining companies trying to greenwash their similarly inefficient and incredibly wasteful process creates a functional symbiosis that simply ends up either worsening environmental outcomes, or just shifting them around between different types of impact. This is nothing to celebrate.