Profits vs. the Environment: Billionaire Tom Steyer Excoriates bitcoin Mining

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Taking Aim at Bitcoin Mining

Think repurposing dying coal plants to mine bitcoin is a smart move? Renowned hedge fund billionaire and environmentalist Tom Steyer strongly suggests you think again.

In a recent interview with Yahoo Finance, Steyer came down hard on ventures that rely on inexpensive, dirty fossil fuels that pollute land, air, and water to mine the increasingly lucrative digital currency.

What Is Crypto Mining Anyway?

If you think crypto “mining” involves hard hats and underground extraction equipment, you’d be sorely mistaken. Rather, the process of recording new transactions on the BTC blockchain requires sophisticated, high-powered computers to solve increasingly difficult mathematical computations. The first “miner” in the race to solve a computation is rewarded with a piece of bitcoin–which at a current price hovering around $61,000 can be quite a windfall.

But that doesn’t mean crypto mining doesn’t have its own connection to fossil fuels. Unfortunately, the problem-solving process requires a significant amount of energy–often the kind of energy that comes from burning tons and tons coal. And while making money may be a common practice for Steyer the billionaire, how it’s accomplished matters to Steyer the environmentalist.

So how much energy does bitcoin mining burn? According to an analysis completed by Cambridge University, the process consumes 121.36 terrawatt hours of energy a year. That’s more energy than is consumed by the entire country of Argentina.

Lowering Bitcoin’s Environmental Impact

Steyer said he recently received a proposal to invest in a BTC mining operation located next to a coal plant. The teaser was that profits would be huge because no transportation costs would be incurred to move the coal to be burned.

Transitioning mining operations to ones that utilize sustainably generated energy is the answer, said Steyer. “That’s kind of the overall take on how we reduce emissions,” he said.

The issue becomes even more imperative as China’s crackdown on mining earlier this year has resulted in a shift to the United States as the worldwide leader. Presently, the U.S. produces over 40 percent of bitcoins mined.

In addition, SEC Chair Gary Gensler has been pushing for regulation of cryptocurrencies, which could open the door to more mainstream activity. How such a change might impact the environment is yet to be determined.

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