Greenpeace has released a new report urging Wall Street to take responsibility for the environmental impact of crypto mining, particularly in relation to bitcoin mining and its excessive global energy consumption.
The report stated that Bitcoin (BTC) mining has become a major industry dominated by traditional financial institutions that are investing in and operating large-scale facilities, consuming vast amounts of energy. In 2023, global Bitcoin mining used approximately 121 TWh of electricity, equivalent to the entire gold mining industry or a country like Poland, resulting in significant carbon emissions. These mining facilities were reported to use as much electricity as a small city.
Despite claims of Bitcoin being independent from the mainstream financial system, the report highlighted the deep connections between the industry and traditional finance. Bitcoin mining companies rely on financial support from banks, asset managers, insurers, and venture capital firms for capital to establish and maintain their operations.
The report identified Trinity Capital, Stone Ridge Holdings, BlackRock, Vanguard, and MassMutual as the top five financiers responsible for over 1.7 million metric tons of CO2 emissions from Bitcoin mining in 2022, equivalent to the annual electricity use of 335,000 American homes. Companies like Marathon Digital, Hut 8, Bitfarms, Riot Platforms, and Core Scientific were noted to generate emissions comparable to 11 gas-fired power plants.
Greenpeace emphasized that Bitcoin’s environmental impact relative to its market value is similar to beef production and gasoline from crude oil, and has worsened with the industry’s growth. The energy-intensive Proof-of-Work (PoW) consensus mechanism used by Bitcoin requires miners to solve complex algorithms, consuming significant electricity.
The report warned that energy-hungry miners are straining electrical grids globally, diverting electricity needed for housing, transportation, and manufacturing to meet climate targets. It argued that traditional financial institutions, banks, and Wall Street are more responsible for encouraging energy consumption than the miners themselves, through tax breaks and other incentives.
Greenpeace proposed that financial institutions should disclose their environmental incentives to mitigate the negative impact on the environment. They called for Bitcoin miners to report data on their energy consumption and carbon emissions, as well as for financial companies to disclose emissions associated with their investments in Bitcoin mining companies.
The report suggested that Bitcoin miners should pay a fair share for their electricity usage, strain on electrical grids, greenhouse gas emissions, water consumption, and disruption to communities. It recommended exploring alternative consensus mechanisms for Bitcoin to address the energy-intensive PoW model and ultimately reduce Bitcoin’s environmental impact.