In this article, I shall prove that the human brain is capable of anything by attempting to explain cryptocurrencies' impact on the environment as someone who is horrible with both money and technology. I find that there is a need to popularise this discussion and push the wider public towards research, and I’m here to prove it can be done. My credentials are a four in Maths, an ongoing Fine Arts degree, and about two weeks' worth of research. Let the fun commence.
To explain Cryptocurrency, I need to explain the blockchain. I was extremely disappointed to find no real-life blocks were involved. It got even worse when I found out the NFT monkeys were fake. Devastating. What a web of lies we live in.
Chains, blocks, a depressing lack of 3D objects
A blockchain is a network that stores information in a decentralised manner, peer to peer. All the information is recorded on the ledgers (a database) and saved in these “blocks”, that are “chained” in a sequence. The computers involved in making transactions within this network are referred to as nodes. Some of the appeal is in the decentralised nature of the system since if one of the nodes becomes compromised, the system will still work as normal. The transactions are also completely transparent, and the information stored in the blockchain can be viewed by everyone involved.
Many people that like crypto love the fact that it works peer-to-peer and has no banks involved. Since crypto became popular after the 2008 economic crisis, it is no surprise that the people who have been making use of it distrust banks. All the transactions made in the blockchain can be traced back to their nodes of origin. The existence of said nodes makes the network safer against hackers, as the information is distributed across multiple hard drives. Usually, the transaction information would be stored in a cloud, which would makes it more vulnerable.
A step-by-step walk through:
Let’s say Steve wants to buy something. He performs a transaction, which is duplicated and directed to this peer-to-peer decentralised network, that via a consensus decides if it's legitimate or not. After approval, the transaction is grouped with other ones and recorded in a block. This new block is connected to a previous block via the aforementioned “chain”. After being stuck in this block prison, the information cannot be modified or tampered with, as it would result in the incorrect sequencing of all the other blocks.
This technology has since expanded from financial transactions but is more well known for being the structure that holds up Bitcoin transactions.
What IS crypto when it's at home?
An easy joke to make is that crypto is just “pretend money” lacking any inherent value. The reason why I won’t make that joke is that any money is, on a base level, “pretend money”.
The real definition is that cryptocurrency is a virtual alternative to our usual currency. It is secured by coding (cryptography) and verified by a network of “nodes”. It is not controlled or issued by banks or the government, which is why Anarcho-capitalists seem to go crazy over it. It is also famously used to buy and sell drugs, which is why teen boys seem to go crazy over it.
Cryptocurrency is generated via “mining”, which is another beast altogether. Many Reddit threads were composed to answer this question. I’ll try to keep it simple.
Since crypto relies on a decentralised system that has no third party to approve transactions and issue currency, the process is done by a group of peers. This process is referred to as mining. Theoretically, mining can be done by everyone. The people involved in this process use software to solve a math problem, and are rewarded with crypto.
The process assures safety by changing the difficulty of the problem based on the speed at which they are being solved. Nowadays, the process of solving this algorithm via software is much more energy-consuming, and most miners use graphics cards, which will do it faster at the expense of generating extreme heat and consuming a lot of electricity.
And this is more or less where the environmental issue lies with cryptocurrency.
People love carbon
So, the greater the power behind your machine, the bigger your odds of solving the problem the algorithm presents you with since the difficulty is updated as the mining happens faster. It is easy to imagine the problem this would lead to. The problem gets harder. More power is needed. The power and competition increase, which means that the speed does as well. The difficulty, then, increased ad nauseam. Life is a nightmare, the monkeys are non-fungible, etcetera.
The competition and rise in power needed to mine Bitcoin, for example, means that specific computers were made for that. The process alone has generated more energy than Norway consumed in the entirety of 2020. The United States has, alone, emitted about 40 billion tons of carbon dioxide per kWh. China has banned cryptocurrency mining in 2021 due to the ridiculously high emissions it produced.
So, what's the point of this?
Cryptocurrency mining, when combined with the other non-regulated carbon emissions, can be extremely dangerous to the already delicate environmental situation we are in. It is one of the practices that remains adopted by multiple powerful businesses, while the everyday citizen is asked to mind their own “carbon footprint”.
Cryptocurrency remains a very niche subject. Most people do not understand what it means and how it works. With blockchain technology branching out of the financial bubble and crypto becoming more mainstream, the wider public should be educated about the consequences of this practice.
As financially inept as you might be, you’re not too inept to understand how this affects you.