{"id":449054,"date":"2022-05-18T17:19:15","date_gmt":"2022-05-18T14:19:15","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/the-crypto-collapse-is-a-good-thing-for-the-climate\/"},"modified":"2022-05-18T17:19:15","modified_gmt":"2022-05-18T14:19:15","slug":"the-crypto-collapse-is-a-good-thing-for-the-climate","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/the-crypto-collapse-is-a-good-thing-for-the-climate\/","title":{"rendered":"#The crypto collapse is a good thing for the climate"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_84 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a2e73787e478\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a2e73787e478\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/the-crypto-collapse-is-a-good-thing-for-the-climate\/#%E2%80%9CThe_crypto_collapse_is_a_good_thing_for_the_climate%E2%80%9D\" >&#8220;The crypto collapse is a good thing for the climate&#8221;<\/a><ul class='ez-toc-list-level-2' ><li class='ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/the-crypto-collapse-is-a-good-thing-for-the-climate\/#Cryptos_loss_climates_gain\" >Crypto\u2019s loss, climate\u2019s gain?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/the-crypto-collapse-is-a-good-thing-for-the-climate\/#Tipping_points_and_death_spirals\" >Tipping points and death spirals<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/buradabiliyorum.com\/en\/the-crypto-collapse-is-a-good-thing-for-the-climate\/#Bitcoin_ban_or_boycott\" >Bitcoin ban or boycott<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"%E2%80%9CThe_crypto_collapse_is_a_good_thing_for_the_climate%E2%80%9D\"><\/span>&#8220;The crypto collapse is a good thing for the climate&#8221;<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<p><img decoding=\"async\" src=\"https:\/\/img-cdn.tnwcdn.com\/image?fit=796%2C417&amp;url=https%3A%2F%2Fcdn0.tnwcdn.com%2Fwp-content%2Fblogs.dir%2F1%2Ffiles%2F2022%2F05%2FCrypto.jpg&amp;signature=81815f9314032108be07aa1dc9bd47e5\" \/><\/p>\n<div>\n                            Cryptocurrencies like bitcoin <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/bitcoin.org\/en\/bitcoin-paper\">were meant to be used<\/a> as digital cash. Instead, they\u2019ve become popular as speculative investments. As well as being resource-intensive and <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.nytimes.com\/interactive\/2021\/09\/03\/climate\/bitcoin-carbon-footprint-electricity.html\">inherently wasteful<\/a>, cryptocurrencies are also incredibly volatile. Prices <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/theconversation.com\/cryptocurrencies-why-theyve-crashed-and-what-it-could-mean-for-their-future-183048\">for the largest cryptocurrencies<\/a>, bitcoin and ethereum, have both <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/fortune.com\/2022\/05\/11\/bitcoin-price-down-from-peak-crypto-winter-terra-ust-inflation\/\">dropped by over 55%<\/a> in six months, leading some to <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/davidgerard.co.uk\/blockchain\/2022\/05\/10\/terras-stablecoin-does-a-2008-crisis-ust-crashes-and-takes-bitcoin-with-it\/\">suggest<\/a> that regulation is needed to contain the turmoil.<\/p>\n<p>Some are <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/theconversation.com\/stablecoin-volatility-shows-an-urgent-need-for-regulation-to-protect-consumers-182886\">blaming sliding prices<\/a> on one specific contagion, a collapsing \u201cstablecoin\u201d called <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/newmoneyreview.com\/index.php\/2022\/05\/16\/terra-operators-bailed-out-crypto-whales\/\">TerraUSD<\/a> which is supposed to be pegged to the US dollar. But the current cryptocurrency market crash is more likely a combination of lots of factors.<\/p>\n<p>                <iframe loading=\"lazy\" src=\"https:\/\/fast.wistia.net\/embed\/iframe\/gpmn9xkc7o?videoFoam=true&amp;autoPlay=true\" title=\"\" allowtransparency=\"true\" frameborder=\"0\" scrolling=\"no\" class=\"wistia_embed\" name=\"wistia_embed\" allowfullscreen=\"\" msallowfullscreen=\"\" width=\"100%\" height=\"100%\"><\/iframe><\/p>\n<p>For years, interest rates have been close to zero, making bank bonds and treasury bills look boring as investments, while cryptocurrencies and digital <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/theconversation.com\/nfts-why-digital-art-has-such-a-massive-carbon-footprint-158077\">non-fungible tokens (or NFTs)<\/a> linked to artwork, look <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>ealing. However, the US Federal Reserve and the Bank of England recently <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.cnbc.com\/2022\/05\/04\/fed-raises-rates-by-half-a-percentage-point-the-biggest-hike-in-two-decades-to-fight-inflation.html\">increased interest rates<\/a> by the largest amount since 2000.<\/p>\n<p>Continuing COVID controls and Russia\u2019s <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/jacobinmag.com\/2022\/03\/crypto-bitcoin-ukraine-russia-war-finance-funding\">invasion of Ukraine<\/a> have also sobered up the markets. Bitcoin was designed to be indifferent towards governments and banks, <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/theconversation.com\/bitcoin-isnt-getting-greener-four-environmental-myths-about-cryptocurrency-debunked-155329\">but investors generally aren\u2019t<\/a>. They\u2019re cutting sources of risk from their portfolios and <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.bloomberg.com\/news\/articles\/2022-05-06\/bitcoin-testing-of-lows-has-traders-wary-of-break-below-32-000?srnd=cryptocurrencies-v2&amp;sref=M8H6LjUF\">dumping crypto<\/a>.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Cryptos_loss_climates_gain\"><\/span>Crypto\u2019s loss, climate\u2019s gain?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The most polluting \u201cproof-of-work\u201d cryptocurrencies, like bitcoin, ethereum, and dogecoin, together use around 300 terawatt-hours (TW\/h) of <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.sciencedirect.com\/science\/article\/pii\/S2542435120303317\">mainly fossil-fuelled electricity<\/a> each year. Bitcoin has an annual carbon footprint of around 114 million tonnes. That\u2019s roughly comparable to 380,000 <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.theguardian.com\/science\/2021\/jul\/19\/billionaires-space-tourism-environment-emissions\">space rocket launches<\/a>, or the annual carbon footprint of the Czech Republic.<\/p>\n<p>Proof-of-work mining can be thought of as a controlled way of wasting energy. The process involves specialist computers repeatedly taking random shots at guessing a long string of digits. The amount of computing power dedicated to this effort is referred to as the network\u2019s hash rate.<\/p>\n<p>If the hash rate drops for any reason, because of power cuts or price dips, for example, the difficulty of the guessing <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/game\/\" data-internallinksmanager029f6b8e52c=\"7\" title=\"Game\" target=\"_blank\" rel=\"noopener\">game<\/a> is automatically adjusted to ensure the network can find a new winner every ten minutes. Each winner then gets a go at verifying transactions occurring on the network and is awarded 6.25 newly minted bitcoins.<\/p>\n<p>Whether the guessing game is profitable or not depends on how much the mining outfit has paid to set up their computers and for the energy to run them. A 2020 survey indicated that 39% of the electricity powering proof-of-work mining machines is <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.jbs.cam.ac.uk\/wp-content\/uploads\/2021\/01\/2021-ccaf-3rd-global-cryptoasset-benchmarking-study.pdf\">generated by renewables<\/a>, meaning the majority is met with fossil fuels, of which coal is <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.cell.com\/joule\/fulltext\/S2542-4351(22)00086-1?_returnURL=https%3A%2F%2Flinkinghub.elsevier.com%2Fretrieve%2Fpii%2FS2542435122000861%3Fshowall%3Dtrue\">a leading player<\/a>. The higher the cryptocurrency price, the more cash mining outfits are prepared to waste on this electricity, until the costs of winning outweigh the rewards.<\/p>\n<p>With the bitcoin price falling, the financial incentive to waste energy for mining bitcoin should be lower. In theory, that\u2019s good for the climate. But, surprisingly, the network\u2019s hash rate (and carbon footprint) remains very close to its all-time high, averaging <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.blockchain.com\/charts\/hash-rate\">around 200 quintillion hashes per second<\/a>. The scale of this continued interest means bitcoin mining at current prices is probably still profitable. But for how long?<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Tipping_points_and_death_spirals\"><\/span>Tipping points and death spirals<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Bitcoin\u2019s value has temporarily dropped below the estimated cost of production <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/news.bitcoin.com\/miner-capitulation-number-a-look-at-when-bitcoins-price-crashed-below-cost-of-production\/#:%7E:text=%E2%80%9CBTC%20was%20at%20risk%20for,%2434K%2C%E2%80%9D%20he%20added.\">several times before<\/a> without significant long-term damage to the hash rate. But should the market stagnate for long enough, proof-of-work cryptocurrencies will start to see an increasing number of miners capitulate.<\/p>\n<p>Miners with the highest costs are likely to sell off their bitcoin holdings as profitability drops, creating even more selling pressure in the market. Short-term capitulation among smaller mining outfits with high costs (often using intermittent renewable energy) is normal.<\/p>\n<p>But a domino effect with major mining firms closing down one after another could cause crypto prices, and the network\u2019s carbon emissions, to drop rapidly towards zero. This event is called <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/cointelegraph.com\/news\/death-spirals-and-btc-what-happens-when-miners-capitulate\">a bitcoin death spiral<\/a> in crypto-speak.<\/p>\n<p>Besides bitcoin mining price predicaments, there are other potential tipping points to consider. Many big investors, especially those who bought in at higher prices, are currently underwater \u2013 weighed down with big bags of bitcoin.<\/p>\n<p>El Salvador\u2019s president, Nayib Bukele, has <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.cnbc.com\/2022\/05\/09\/el-salvador-buys-500-bitcoin-as-crypto-market-sell-off-continues.html#:%7E:text=El%20Salvador%20purchased%20bitcoin%20at,on%20data%20tracked%20by%20Bloomberg.\">reportedly just brought<\/a> his country\u2019s total reserve of bitcoin up to around 2,300, or about US$72 million at current prices. His country\u2019s crypto losses are <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.wsj.com\/articles\/el-salvadors-president-went-all-in-on-bitcoin-then-it-tanked-11652540400\">adding to fears<\/a> of an imminent debt default that would cause significant pain to those who had no say in their leader\u2019s gamble.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Bitcoin_ban_or_boycott\"><\/span>Bitcoin ban or boycott<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Prominent <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/tyler\/status\/1524468095561125890\">investors may find<\/a> bitcoin bear markets a bore. But <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.sciencedirect.com\/science\/article\/pii\/S2214629621004813?dgcid=author\">research shows<\/a> the environmental losses from high-priced cryptocurrencies are far more disturbing.<\/p>\n<p>The damage caused by bitcoin mining disproportionately affects poor and vulnerable communities, as mining outfits and <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/news.trust.org\/item\/20220204092330-2xym9\">crypto developers take advantage<\/a> of economic instability, weak regulations, and access to cheap energy. Locals wanting to use these resources for productive purposes can be <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/theconversation.com\/bitcoin-chinas-crackdown-isnt-enough-only-a-global-effort-can-stop-cryptos-monstrous-energy-demand-161776\">priced out by bitcoin miners<\/a>. These communities also tend to face the sharp end of the climate crisis, which crypto mining fuels.<\/p>\n<p>Governments worldwide want to appear keen on cryptocurrencies as <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.cityam.com\/my-mission-is-to-make-the-uk-love-crypto-says-hancock\/\">tools for economic growth<\/a>. But the crash shows that bitcoin is both useless as <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/fortune.com\/2021\/04\/25\/bitcoin-btc-value-drop-use-case-currency-digital-gold\/\">a mainstream means of exchange<\/a> and as a reliable store of value, <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.frontiersin.org\/articles\/10.3389\/fbloc.2020.00022\/full\">bringing most users<\/a> far more pain than profit.<\/p>\n<p>In the aftermath of the 2008-10 global financial crisis, governments promised a crackdown on toxic financial instruments with make-believe valuations. For the global climate and a stable economy, cracking down now on crypto will be a <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/doi.org\/10.1016\/j.erss.2021.102394\">boon for everyone<\/a>. But if environmental regulation efforts are not globally coordinated or far-reaching enough, crypto\u2019s climate contagion <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/doi.org\/10.1016\/j.joule.2022.02.005\">will continue to grow<\/a>.<\/p>\n<p><em>Article by <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/theconversation.com\/profiles\/peter-howson-410183\">Peter Howson<\/a>, Senior Lecturer in International Development, <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/theconversation.com\/institutions\/northumbria-university-newcastle-821\">Northumbria University, Newcastle<\/a><\/em><\/p>\n<p><em>This article is republished from <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/theconversation.com\">The Conversation<\/a> under a Creative Commons license. Read the <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/theconversation.com\/cryptocurrency-price-collapse-offers-hope-for-slowing-climate-change-heres-how-183143\">original article<\/a>.<\/em>\n                        <\/div>\n<p><script async src=\"\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more like this article, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/technology\/\" target=\"_blank\" rel=\"noopener\">Technology category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/thenextweb.com\/news\/crypto-collapse-good-thing-for-climate\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;The crypto collapse is a good thing for the climate&#8221; Cryptocurrencies like bitcoin were meant to be used as digital cash. Instead, they\u2019ve become popular as speculative investments. As well as being resource-intensive and inherently wasteful, cryptocurrencies are also incredibly volatile. Prices for the largest cryptocurrencies, bitcoin and ethereum, have both dropped by over 55%&#8230;<\/p>\n","protected":false},"author":1,"featured_media":449055,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/img-cdn.tnwcdn.com\/image\/hardfork?filter_last=1&fit=1280,640&url=https:\/\/cdn0.tnwcdn.com\/wp-content\/blogs.dir\/1\/files\/2022\/05\/Crypto.jpg&signature=b9ff44bc896a7b0d17e2f2a9d60f91f4","fifu_image_alt":"","footnotes":""},"categories":[18],"tags":[],"class_list":["post-449054","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-technology"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/449054","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=449054"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/449054\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/449055"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=449054"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=449054"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=449054"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}