Cryptocurrency, like Bitcoin and Ethereum, might not be something you usually have in your wallet in real life, but it certainly has real-life impacts on the environment. The amount of energy and electricity it takes to feed cryptocurrencies greatly contributes to the number of greenhouse gases emitted into the atmosphere by power plants. According to the Digiconomist, the Bitcoin network “now consumes more energy than a number of countries,” including Austria and the Czech Republic, and has a carbon footprint comparable to Denmark’s.
The enormous energy hogging of cryptocurrency might not come at a surprise to environmental researchers and digital sustainability enthusiasts, but putting numbers to the cost and damage done by cryptocurrency still eluded them. In order to find these numbers, a team of economic researchers at the University of New Mexico decided to evaluate how much money all that energy use costs and how much damage it’s causing to the environment.
It’s a particularly important subject to study at a time when communities are struggling with the effects of climate change. Researcher and economics professor Robert Berrens was already used to “estimating the monetary damages, due to health and environmental impacts, of different economics activities and sectors” to understand how different activities and technologies are connected to energy use and consumption. So the team set out to use already existing information about cryptocurrency and energy use to turn the data into dollars.