Cryptocurrency: A New and Dangerous Climate Disruptor

The get-rich-quick scheme, banned in China and elsewhere, is invading U.S. communities unchecked, posing as an “equalizing, democratizing” currency. It’s not. By Maura Stephens and Karen Edelstein


This article originally appeared on the System Change not Climate Change website.

In capitalism every few years or decades something new comes along that causes rapid creation of wealth — think microwaves, electronics, and military weapons expansion during the Cold War; semiconductors; the rise of venture capital as an industry; the personal computer craze of the 1980s; the rise of the Internet and hedge funds in the 1990s followed by Internet commerce, genomics, nanotechnology, and the commercialization of information gathering and surveillance (data mining) to benefit corporations and investors.

One of the latest “innovations,” as they’re known in the financial sector, is cryptocurrency, which has exploded since its public introduction in 2013. Related to data mining, cryptocurrency mining has taken off like wildfires in a windstorm — and like those deadly events can accelerate climate chaos in ways we couldn’t imagine just a few years ago.

In the fight to slow the buildup of greenhouse gases, many scientists, policymakers, and environmental advocates have focused largely on the extraction of fossil fuels. Fracking for methane (“natural” gas), frack-sand mining, bitumen (“tar sands”) extraction, and mountaintop demolition to access coal are certainly implicated in the alarmingly steep increase in carbon in our atmosphere in recent years. But fossil fuel extraction is only one of the culprits in the carbon buildup. 

Other significant human-exerted forces include

agricultural practices, land clearing, industry, and decomposition of wastes in landfills. But aside from the ecological and energy-extraction components, there is a behavioral component we cannot ignore, and that’s where cryptocurrency mining fits in.

We need to look at patterns of consumption and, importantly, the environmental, health, and biodiversity costs associated with making money the capitalist way, which is not designed to have positive bearing on the health and wellbeing of anyone but the super-rich.

Cryptocurrency, not in itself a fossil fuel, is far from benign environmentally; its operators are appropriately called “miners,” and the industry is as perilous as the plastics industry — both intricately tied to fossil fuel extraction.

What’s the Appeal?

Bitcoin is big.

Let’s note here that the term “bitcoin” (lowercase) has become synonymous with and is frequently used interchangeably with “cryptocurrency,” although Bitcoin (uppercase) is a brand name among many other cryptocurrency brands.

Fluctuation of Bitcoin value. Source: CoinDesk (Oct. 4, 2021)

FracTracker experts estimate that nearly 40% of U.S. investors own Bitcoin, a huge number, especially considering the industry is only a few years old.

In early October 2021 Bitcoin’s price, which like all cryptocurrencies has fluctuated wildly, was at nearly $50,000, bumping the global value of the currency close to $930 billion. Estimates from July 29 indicated that all cryptocurrencies such as Ethereum, Litecoin, Monero, Dogecoin, and others had a “value” of close to $1.6 trillion, or about 2.1% of the world’s money supply.

Who Loves It Most?

Many believe, with enthusiasm approaching religious fervor, that this form of cryptocurrency is the answer to an otherwise centralized banking system that has benefited the privileged few.

Anyone who opens an online account and puts some cryptocurrency into it can send “money” across the world in a matter of minutes — 24 hours a day, 7 days a week, 365 days a year — which makes this system appealing. And many supporters of Bitcoin tend to look to their short-term gains, rather than long-term impacts, claiming that the “societal value Bitcoin provides is worth the resources needed to sustain it.”

This technology is being used in many industries, as Billy Silva lists in Medium: “capital markets, financial services, payments and remittances, derivatives, identity and reputation management, governance, sharing economy, supply chain, auditing, stock trading, internet of things, insurance, healthcare, and others.”

Many financial publications and advisers are featuring stories and webinars about cryptocurrencies. Some of them are enthusiastic, salivating over the potential success of this new “disruptor” along the lines of Netflix, which sent Blockbuster Video to the graveyard.

Who Loves It Less?

Some, like Investopedia’s Nathan Reiff and Somer Anderson, publish disclaimers such as this:

Investing in cryptocurrencies and other initial coin offerings (ICOs) is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies or other ICOs. …

The value of one type of cryptocurrency does not necessarily follow that of another. Cryptocurrency values are volatile for a variety of reasons, including their relative newcomer status as investments.

Plus, anytime an unregulated industry’s stocks skyrocket amid speculative behavior and seem both too good to be true and grossly overvalued, we may be looking at a bubble.

Jeremy Grantham, an investment analyst and asset-management firm CEO widely quoted in capitalist financial circles, has been warning that the current market situation is a “fully fledged epic bubble. Featuring extreme overvaluation, explosive price increases, frenzied issuance, and hysterically speculative investor behavior, …this event will be recorded as one of the great bubbles of financial history.”

He’s not talking about only cryptocurrencies, but they are certainly a prime driver of the bubble.

The world learned about the aftermath of bubbles most recently during the 2007-10 great economic meltdown, the fallout from which hit people all around the world. Essentially a Ponzi scheme, it was caused by the United States’ deadly combination of unscrupulous lenders and greedy or misinformed borrowers looking for a short-term payout.

Unscrupulous lending by unregulated banks and private firms (light green and blue) were largely responsible for the housing bubble that led to the 2007-10 financial crisis. In all, 12 million loans “valued” at nearly $2 trillion were given. Chart reprinted with permission from The Orange County Register / June 9, 2007

There had been attempts by bipartisan legislators in Congress to restrict subprime mortgages — loans given, mostly by unregulated private firms, to high-risk or no-credit-history borrowers, often with hidden and crippling payback requirements — as well as the hedge funds and derivatives they spawned. But they were unsuccessful in the age of President George W. Bush and Federal Reserve Board chair Alan Greenspan. Indeed, Bush stopped all attempts to check the predatory lending schemes even amidst strenuous opposition from the attorneys general and banking superintendents of all 50 states.

Who Should Love It Least?

The simple fact is that cryptocurrencies are unregulated. They’re on a rampage. They’re already benefiting only the rich — exactly the opposite of an initially intended economic goal of democratization and equalization. They are a smoke-filled bubble.

Bubbles eventually burst.

Plowing through the pandemonium, environmentalists, social-justice advocates, community stewards, and labor organizers need to focus on the even broader risk connected with crypto mining — one that could affect the survival of our planet, not just the wealthiest of investors.

This risk stems from the astronomical quantity of energy required to run some types of cryptocurrency operations, without returning any benefit to local communities or job seekers — let alone benefiting smaller-scale investors. Those investors could be wiped out as were so many homeowners and borrowers, especially in communities of colour and low-income areas, in 2007-10, even as culpable big lenders were bailed out by the U.S. government (Remember “Too Big to Fail”/”Too Big to Jail”?).

G. W. Bush and Barack Obama bailed out unregulated speculators after the 2007-8 bubble burst; small-timers paid the price. Illustration: M. Hyess

How It Works: Like Playing Cards Stacked on Wishes

The first thing to understand is that cryptocurrency, like paper money, has no intrinsic value. There’s no gold or even a precious substance that we’d need for life on Earth like, say, a gallon of water, backing it, no government guaranteeing it.

Just as countries abandoned the gold standard decades ago and replaced it with a system called “fiat money” (such as the U.S. dollar), it simply represents faith that individuals have when they give and receive that currency. Its decentralized process, with millions of hosts, was ostensibly created in part to cut down on illegal transactions. Furthermore, each different cryptocurrency — Bitcoin, Ethereum, etc. — has its own approach, adding to the complexity.

One important term (among many arcane ones) in understanding cryptocurrency is blockchain, aka distributed ledger technology, DLT. This is a way of keeping track of transactions that’s transparent to anyone who wishes to see them, and allows transactions to occur without the use of a middle-entity such as a bank or credit card company.

The blockchain is essentially a database owned by the network, which itself consists of millions of computers around the world, each with its own key. Whenever a transaction occurs, the details (except for the two parties’ identities) are shared as a cryptographic puzzle with everyone on the network. The computer on the vast network that first guesses the details is the winner. This winner of the verification or validation process collects several newly “minted” bitcoins — each now worth $50,000 or so — as a reward.

That’s a big payout and tempting even for minor investors, but in truth they can’t compete: Those with the most and the fastest computers reap the most money.

Digiconomist reports that the carbon footprint of a single Bitcoin block in 2021 is roughly equal to the carbon footprint generated by 1,890,394 Visa transactions. single mined Bitcoin has a carbon footprint of 259 tons (235 tonnes),in comparison to that of a Bitcoin’s worth of gold, at 24.25 tons (22 tonnes).

Another term that is perhaps less known, but crucial in discussing the impacts of cryptocurrency on the environment, is proof-of-work,” a process used by both Bitcoin and Ethereum. This form of cryptocurrency validation uses a method to achieve consensus on the blockchain. Simply put, proof-of-work cryptocurrency is created as many machines all work to solve the same complex mathematical equation, or puzzle. The first machine to solve the problem wins.

Thus, the more machines you have working on the same puzzle, the greater your chances of profiting. As the complexity of the computations increases, it becomes harder for the average person to profit, since one must have thousands of machines to remain competitive.

And so the system begins to resemble a traditional centralized capitalist system that remains profitable — to the very wealthy.

Unregulated, Climate-Crazy Profiteering

This facet of current cryptocurrency mining has drawn criticism from previous enthusiasts, including Jackson Palmer, who cocreated Dogecoin. He now calls it “an inherently right-wing, capitalistic technology built primarily to amplify the wealth of its proponents through a combination of tax avoidance, diminished regulatory oversight, and artificially enforced scarcity.”

And, he adds, “Cryptocurrency is like taking the worst parts of today’s capitalist system (e.g., corruption, fraud, inequity) and using software do technically limit the use of interventions (e.g., audits, regulation, taxation) which serve as protections or safety nets for the average person. Financial exploitation undoubtedly existed before cryptocurrency, but cryptocurrency is almost purpose built to make the funnel of profiteering more efficient for those at the top and less safeguarded for the vulnerable.”

And it’s catastrophically energy-intensive.

While there are other models for cryptocurrency mining, the proof-of-work model is of particular concern to environmentalists worldwide because of its energy-intensive nature. Proof-of-work mining can use the same amount of energy as an entire country such as Argentina (population 45.2 million).

2018 study published in Nature estimated conservatively, based on 2017 transactions, that the number of computers used to mine Bitcoin alone could produce enough greenhouse gases to raise global temperatures above the 2-degree Celsius tipping point before 2048. It’s important to note that cryptocurrency mining energy use has risen 320% in the past five years.

Megatons of Electronic Waste and Attendant Toxins

Emissions from the electrical use are not the only ecological disaster. The machines generate a lot of heat, so they need to kept cool, requiring more energy. Being used for ever increasingly sophisticated computations, they need to be the speediest and most powerful models available. Computer companies build in fast obsolescence — underscored in summer 2021 by Apple’s response to the revelation by the University of Toronto’s Citizen Lab of “ForcedEntry,” as they call the Pegasus spyware that made 1.65 billion Apple iPhones and other devices vulnerable to a complete, almost undetectable takeover by the private Israeli surveillance firm NSO.

To counter the problem Apple issued a patch, but only for newer devices, thus forcing those with devices six or more years old to remain vulnerable or purchase new ones.

These electronics contain toxic chemicals and heavy metals, which leach into soil, water, and air — and the bodies of humans and other species.

In September 2021 a Dutch team economics team published a study, “Bitcoin’s growing e-waste problem,” in the journal Resources, Conservation and Recycling. The researchers found that as of May 2021, Bitcoin’s annual e-waste generation had added up to 6.6 million pounds (30.7 metric kilotons), with an average per-transaction e-waste of 9.6 ounces (272 grams).

Who’s Fighting Back?

Everything we do about climate change will be undermined by growing cryptocurrency mining operations unless governments address this industry, around which facts and figures are changing daily.

China had been historically the worldwide center of cryptocurrency mining. However, on September 24, 2021, China’s central bank made all cryptocurrency-related activities illegal (supposedly to support the country’s climate goals). This alone at least temporarily dropped the global energy use for the industry as Chinese facilities went offline.

But this also means that the most attractive new geographic centers for mines are now elsewhere, especially in the United States.

Unless truly energy-efficient alternatives to proof-of-work mining are adopted, the energy use for this industry remains impossibly outsized. There is one potentially less energy-intensive model known as “proof-of-stake,” but there is no proof that it would either work for transactions or cut energy use sufficiently, and the biggest cryptocurrencies including Bitcoin are unlikely to switch from their current proof-of-work model.

It’s imperative to keep on top of its whack-a-mole next appearances.

The Finger Lakes: Test Case for Lunacy

What began as a small protest against cryptocurrency mining along the western shore of Seneca Lake, the deepest of the stunning Finger Lakes of New York State, is now an international story as the world watches Bitcoin operators bulldoze their way into the United States.

Location of Greenidge Generation Facility, Dresden, NY. Map/Image: FracTracker Alliance

The Greenidge facility along the shores of Seneca Lake is now the test case for proof-of-work crypto in the United States. This once-mothballed coal-fired plant sat dormant for seven years before it was repurposed to burn methane (“natural” gas from fracklands in neighboring Pennsylvania) to supply power to the grid in times of high demand, even as public opposition to fracking in New York was growing to a crescendo and prompted the state government to issue a moratorium, and later a ban, on fracking within the state’s boundaries.

Quickly finding the gas power plant unprofitable, the owners installed 7,900 Bitcoin machines. This change in usage increased the air emissions at the Greenidge plant tenfold compared with its previous levels as a “peaker” power plant. In January 2020, for example, operating at 5% of its capacity (similar to when it was serving as a power plant) the plant emitted 28,301 tons of CO2. This is equivalent to what would be produced by the electricity consumption in more than 4,000 households. By December 2020 CO2 emissions jumped to 243,103 tons, increasing by almost ten times. During that same 12-month period, emissions of polluting nitric oxide and nitrogen dioxides, together known as nitrogen oxides (NOx), jumped from 5.2 to 49.2 tons; again, by ten times in the same 12-month period. CO2 and NOx are both potent greenhouse gases that fuel climate warming and instability.

Greenidge’s plan is to expand 25-fold by 2025, using at least 500 megawatts of power along Seneca Lake and elsewhere. It has applied  for a renewal of its air permit, which allows annual emissions of up to 641,878 tons of carbon dioxide equivalent (CO2eq). This is after zero emissions for five straight years (2011-16)

Neighbors are alarmed about the plant’s negative impacts, worried at the thought of losing the region’s clean air, their trust in the 4.2 trillion-gallon freshwater lake that serves as a drinking water source for 100,000 people and the life within and around it, and the region’s vibrant economic engine of agriculture, much of it organic, and tourism — which supports 58,000 jobs and generates $3 billion annually for New York.

As well, the plant is legally permitted to discharge up to 134 million gallons of 108 degree F water daily into Keuka Outlet, a protected trout stream that drains directly into Seneca Lake. Furthermore, thermal inputs of any sort can enhance the growth of environmentally destabilizing harmful algal blooms (HABs), which in recent years have been plaguing the Finger Lakes and many other water bodies.

The Greenidge bitcoin mining facility and fracked-gas power plant mar the landscape of Seneca Lake’s west shore. Photo by Bob Nilsson

Opponents of the facility include residents, property owners, grape farmers, winery owners, and vacationers who flock to the region each year to enjoy this popular tourist destination.

Supporters, aside from Atlas Holdings, the private investment firm behind the project, appear to be limited to politicians in local and state offices, including disgraced former governor Andrew Cuomo, who received $95,000 in donations from the company and its managing partners in 2014, shortly before they purchased the plant. Interestingly, soon afterward the facility received a $2 million state grant to help convert the once-shuttered plant to methane (fracked-gas) from the state, and the NYS DEC also waived any requirements for a comprehensive environmental impact statement.

Thirty other upstate New York power plants could be converted to data centers, with catastrophic consequences for statewide CO2-equivalent emissions.

Before he resigned in August 2021, Governor Cuomo had positioned New York as a leader on climate, instituting the Climate Leadership and Community Protection Act (CLCPA), designed to reduce greenhouse gas emissions. Bitcoin miners have discovered a loophole: By buying up old power plants to generate power for private use, thus operating “behind the meter” (by not supplying power to the grid for public consumption), they’re able to evade the CLCPA requirement that stipulates 70% of the state grid’s electricity must come from renewable sources by 2030.

Greenidge, like other cryptocurrency peddlers, calls itself a “carbon neutral” facility, because it now purchases carbon offsets. But carbon offsets are a form of public relations greenwashing and do not protect communities from industry’s pollution. (Furthermore, the CLCPA does not allow power plants to use carbon offsets. Laws such as this one must be enforced to be effective.)

Coming Soon to a Community Near You?

Cryptocurrency mining requires four things: computing power capable of running complex calculations, a ready source of cheap energy to run the mining computers, proximity to high-capacity power lines, and a way to cool the equipment. In general, locations that require fewer months of air conditioning are more economically attractive. So many mining operators are shopping around for structures like retired electrical generation facilities, including old coal, gas, and nuclear power plants. These typically have desirable features for miners including high-capacity powerlines connected to the grid and built-in cooling systems that often discharge waste heat into an adjacent lake or river.

Data center locations around the world. Source:

According to, there are nearly 2,600 data centers worldwide: 930 in the eastern United States, 378 in the western United States, 556 in Europe, and 498 in Asia. Many are used for other purposes such as cloud-based computer file storage, but an increasing number are used for cryptocurrency mining.

Regardless of whether a facility is intended to be a general data center or a specific cryptocurrency mining operation, communities will want to be aware of where retired electrical generating facilities are in their regions, because those can be attractive for repurposing.

FracTracker Alliance used the Energy Information Administration’s list of retired electrical generation facilities and created this map showing U.S. facilities that could become targets.

Click on the map to explore the dynamic version. Data sources are also listed at the end of this article. Use the Layers dropdown menu to turn layers off and on. Courtesy of FracTracker Alliance. Map Tutorial

Many of these formerly fossil-fuel-fired facilities were sited in “environmental justice” communities whose residents fall into one or more of these demographic groups: low-income, people of color, indigenous, elderly, immigrant, less than high school-educated, rural. On first glance it seems like a benefit that they’re no longer polluting these communities. But replacing them with bitcoin mining would negate any such relief.

Who’s in the Cross-Hairs Next?

Environmentalists and policy-makers in Montana have tried to slow down the expansion of cryptocurrency mining’s climate impacts by implementing zoning restrictions.

Elsewhere communities are being taken by surprise. Journalist Peter Mantius, who runs the Finger Lakes’ only news organization devoted to environmental issues, revealed in July 2021 that Atlas Holdings is planning to open a second bitcoin mining operation in Spartanburg, South Carolina, in a bankrupt printing plant, and another company has sights on one in Paducah, Kentucky.

Pennsylvania is already ravaged by fracking and related infrastructures. Now it is under assault by the bitcoin mining industry as well. Among other projects, a coal plant in Venango County, northwest of Pittsburgh, is being transformed into a cryptocurrency operation, burning waste coal. Two nuclear power plants — one in Beaver County intended to supply energy to a mining operation in Ohio, and another in Luzerne County — are being “repurposed.” In all cases — coal, gas, and nuclear — marketing campaigns claim they are contributing to a “carbon-free future.”

Surprising Resistance, Unsurprising Support

El Salvador became the first government to embrace the use of cryptocurrency, with less than perfect early results including massive public protests.

Other countries besides China have been banning and even criminalizing cryptocurrency because it’s defeating their climate goals and robbing power from the public. Algeria, Bolivia, Cambodia, Colombia, Ecuador, Egypt, Indonesia, Iran, Morocco, Nepal, Pakistan, Taiwan, and Saudi Arabia have banned or severely restricted its use, and Bangladesh has made jail sentences mandatory for anyone caught using or owning any cryptocurrency.

Because of this, as we’ve seen, miners are moving rapidly across the United States, where there are currently no industry regulations and the Securities and Exchange Commission might actually approve an exchange-traded fund that allows investors to put their money directly into cryptocurrencies.

The primary concern for governmental regulators, of course, would be to regulate cryptocurrency so that its volatility would not imperil investors eager to get rich. In early October the Department of Justice announced the creation of  a “national cryptocurrency enforcement team” to prosecute criminal uses such as money laundering and cyber crimes, but that’s a far cry from serious regulation of pollution to communities and watersheds or beginning to halting the socio-ecological harm.

This is a serious nationwide problem. Biden’s Build Back Better initiative, which contains a strong climate component, and the United States has rejoined the Paris Climate Accord. Not that these activities are nearly enough. But clearly, allowing the cryptocurrency industry to proliferate can serve only to undermine overdue plans to reduce greenhouse gases and slow down catastrophic weather events like the floods, fires, and megastorms that have become daily occurrences.

What Can We Do?

The future of our species and others on the planet is made even more precarious unless proof-of-work cryptocurrency changes its climate-busting model.

It will be very difficult to stem the tide of cryptocurrency, given the thrill it seems to give speculative investors and the inroads it has already made into the public consciousness. According to, nearly 50 million U.S. Americans now own a share of Bitcoin.

Cryptocurrency operations must be required by enforceable laws to use 200% renewables. This means that they use only their own on-site renewable energy sources to power their machines, while simultaneously producing an equal amount of renewable energy for the public power grid. Meanwhile, the U.S. Congress must immediately enact a moratorium on cryptocurrency operations lasting a sufficient time to both (a) study proof-of-work’s impacts on air, water, climate, and the long-term economy and (b) give the industry time to make its operations truly sustainable, if indeed that is possible.

In this, New York activists want to position the state as a national leader. Indeed, the Finger Lakes region is home to Ithaca Hours. The brainchild of the visionary Paul Glover, it was the first modern local currency in the United States. An “ecological economic bartering model,” as Glover termed it, Ithaca Hours is based on the value of an hour of work; every type of work, from lawyer to farmworker, rocket scientist to doula, is equally valued.

Imagine spreading the idea of local currencies nationwide, or a currency based on things that have real–not fictional–value such as water or food. That would be the intelligent way forward, instead of permitting energy-intensive cryptocurrency operations that serve only to further enrich certain already-wealthy investors while spewing a staggering amount of greenhouse gases and intensifying climate chaos.

The United States could position itself as a global leader on this front and take a strong stand against cryptocurrencies. From a capitalist standpoint, that’s not such a bad deal as it props up the modern banking and financial sectors. From a competition standpoint, if China could ban cryptocurrencies outright, why can’t the USA?

And from an ecosocialist perspective, banning mining and using cryptocurrencies stops both this massive emissions source and this insane new capitalist craze, both of which harm everyone in society; no amount of wealth based in paper or gold or fiat will serve to save anyone from the ravages of climate chaos.


  • Watch for announcements about plans to repurpose retired electrical generating stations in your community.
  • If you are an investor or have a mutual fund or retirement fund, talk to your financial adviser about why cryptocurrency is a bad bet. We still live in a capitalist society, and as long as we do, we need to use our funds, whatever they are, as tools.
  • Do not invest in cryptocurrency.
  • Instead, invest locally! There are all sorts of ways to do so including local cooperatives, credit unions, community-supported farms, artist collectives, funding established local businesses seeking to expand or improve. Some financial analysts, including Michael Shuman, author of Local Dollars, Local Sense and a workshop leader on the subject, have shown that overall, the return on these investments is as good as or better than gambling on the stock market and other capitalist ventures.
  • Don’t be hoodwinked by industry spin claiming that cryptocurrency enables businesses and governments to “reduce their environmental impact” or “catalyze the development of renewable energy.”
  • Talk to your municipal and statewide policymakers about climate impacts from cryptocurrency mining, and then pressure them to make laws outlawing the practice. It’s hard if not impossible to stop it once it begins, but it it’s not allowed in the first place, your community and all of us will be better off.
  • Push federal policymakers to pass, at the very least, the moratorium as noted above, but seriously, with heavy fines and criminal penalties for any corporate executives and board members found guilty of violating it.
  • If China can ban it altogether, why can’t the United States?
  • Spread the word about the dangers of this new threat.

Art Book Review Books Capitalism China Climate Emergency Conservative Government Conservative Party COVID-19 Creeping Fascism Economics EcoSocialism Elections Europe Event Video Far-Right Fascism Film Film Review France Gaza Global Police State History Imperialism Israel Italy Keir Starmer Labour Party London Long Read Marxism Marxist Theory Migrants NATO Palestine pandemic Protest Russia Solidarity Statement Trade Unionism Trans*Mission Ukraine United States of America War

Join the discussion