Crypto’s Need for Sustainability Standard-Setting Starts Here

Source: Adobe/New Africa

Cryptocurrencies have gained strong momentum over the last couple of years, drawing widespread attention from both proponents and skeptics. While investors have lauded digital currencies for their high yields and fiat-based volatility, critics have decried the environmental impacts and the toll the high-powered computing requirements for powering the blockchain are having on the planet. 

The reality is crypto’s impact pales in comparison to other sources. For example, Bitcoin (BTC) accounts for only 0.23% of the world’s total energy consumption, and accounts for less than half the energy consumed by the global cement industry. Meanwhile, iron and steel production consumes over 8X the energy of Bitcoin with residential air conditioning alone trumping Bitcoin by a factor of 14. 

Of course, regardless of its relative impact, the crypto industry still has a responsibility to do its part to stave off the climate crisis. After all, if the airlines with their giant jet engines can commit to carbon-neutral operations by 2050, surely we can incentivize energy providers to shift to clean energy solutions. 

The Crypto Climate Accord (CCA’s) aims to do just that, with participants vowing to reach carbon net zero “operations by 2040. The problem is, there doesn’t seem to be a clear path to get there. Buying carbon credits while sourcing 100% of its energy from a coal-fired power plant is hardly the long-term solution. 

Neither of these options solve the fundamental problem: there’s no way to effectively measure a company’s carbon-neutral claim. 

Lacking clear standards for measurement and reporting creates a Wild West of assertions, fully ripe for greenwashing and bogus claims. 

With every company using different metrics, it’s impossible to know if they’re really living up to expectations.