Cryptomining can be lucrative, but it comes with an environmental cost

LANSING, Mich. — Luke Lauterback got started mining cryptocurrency because he was cold.

Mining cryptocurrency on his basement computer has replaced their space heater.

“I realized at one point that that was just kind of throwing away my electricity and my money,” said Lauterback, who lives in Lansing. “So I thought, ‘well, my computer gets hot. Why not just try this crypto thing and see if I can just make a couple bucks trying to replace my space heater?””

The reason Lauterback’s computer gets hot enough to keep him warm is because mining cryptocurrency takes a lot of power.

A single Bitcoin transaction uses the same amount of power that an average American household consumes in a month, according to Digiconomist, and is responsible for roughly a million times more carbon emissions than a single Visa transaction.

Cryptocurrencies like Bitcoin are basically digital money, and when you mine it, you’re helping to create it.

Mining is essentially allowing your computer to be used to verify cryptocurrency transactions. Using a mining software, your computer runs complex math problems. Every time your computer correctly solves a math problem, validating a transaction, a small amount of cryptocurrency is created and a small percentage of that new currency goes to the miner.

For Lauterback, a husband and father of one, being a miner has been pretty profitable.

“I mine whenever my computer is idle, for about 23 hours a day,” said Lauterback. “I’ve been doing this for about six months, and I’ve been making about $230 a month in profit.”

“People who don’t know anything about technology could easily start cryptomining in just a few minutes,” he added.

It’s because mining is so easy, because more and more people seem to be investing in crypto, because people like Elon Musk keep tweeting about Dogecoin, that cryptomining has taken off.

A January 2021 survey by the New York Investment Group found that an estimated 22 percent of adults in America have invested in Bitcoin. Of those respondents, 83 percent are looking to include Bitcoin in their future financial plans.

So what’s the problem? The environmental effect of all those computers mining crypto.

Thomas Holt is the director of the School of Criminal Justice at Michigan State University, and studies cryptocurrencies. He said if cryptocurrency becomes a more dominant currency in the world, “The impact could be pretty huge, largely because they utilize so much electricity in order to produce the mining.”

China, for instance, does the majority of the world’s cryptomining, and “so much of their electricity depends on coal,” Hold said. “So the impact of coal on the environment is part of the problem.”

Bitcoin is one of the least eco-friendly currencies, and it’s because of how creating the currency works.

“They use what’s called proof of work in order to validate transactions within the blockchain,” said Holt. “So basically, it means that you have multiple computers, multiple systems that are mining, all trying to solve a mathematical puzzle simultaneously. The first one to get it right is the one that gets the credit in the blockchain.”

Some newer cryptocurrencies are getting away from “proof of work” and using “proof of stake.

“Proof of stake” holds a more sustainable future for cryptocurrencies because it only draws from one computer, which uses far less energy, but eliminates mining.

Ethereum, which Lauterback mines, is one of the cryptocurrencies switching to “proof of stake.”

“Ethereum is moving to Etherium 2.0 in the next few years and it will abandon mining so that it does not consume anywhere near as much electricity as it does right now,” said Lauterbach. “What that will mean for me is I won’t be able to mine Etherium anymore, and this will probably not be profitable in a few years. However, it’ll be an overall positive for the crypto-community, as it will eliminate that environmental barrier.”

TRG Datacenters in Houston, Texas researched which cryptocurrencies are the most eco-friendly, ranking them by the amount of energy required to power each transaction.

Click here to read that list.

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