Just How Antigreen is Crypto? PoW, PoS and Arweave Examined
Crypto criticism is as old as bitcoin, but lately it seems louder. Critics with no depth of understanding of the ecosystem tend to have the strongest opinions. “Crypto is only for drug deals”, or the various profiles of the average crypto user which are completely based on stereotypes (oftentimes the polar opposites depending on who you ask). Those who hate crypto will go after it based on uniformed prejudice.
However, there is a valid concern critics have picked up on during the time of climate crisis: crypto, or more specifically, proof of work, is not nature friendly.
According to this research the greenest payment options by CO2 emissions are Mastercard and paper money. Proof-of-work crypto like ETH and BTC are unsurprisingly the least green.
Putting this data in another context – looking at infrastructure instead of countries – the power-hungriest blockchain alone does not consume as much energy as the gold or banking industries:
All in all, no way of paying for goods is climate neutral. But where does the stigma come from making cryptocurrency the devil?
BTC is undoubtedly the least green single currency, but it’s a narrow approach to look at the most power-hungry example and judge all other tokens in the same way.
Yes, the debate on what is a green currency is important during the climate crisis – but the answer is not that definite. We need to help surface innovations, and talk about them, so that they take over the less green options. Or make them keep up with the market striving for climate neutrality.
KLIMA is a Polygon-based token which represents a stake in the carbon credits market held by the Klima DAO. Returns from the token enable the DAO to buy more carbon and mint more KLIMA. The high APY users can gain from staking KLIMA incentivizes them to hold, and, in turn, this pushes up the price of carbon on the traditional market; it makes greenwashing more expensive, and the rewards gained by carbon negative companies worth even more.
We could say that crypto is not green but that would be ignorant of all the crypto that is innovating and striving for that. It is also extremely unhelpful for the debate because it cuts all progression towards greener alternatives. Besides, let’s be real, this opinion is mostly put on Twitter or Reddit (not climate neutral) from phones or laptops (definitely not climate neutral) paid for with some sort of money which also isn’t climate neutral (as we learned earlier, in any form).
When you think about it, mining some tokens might be equally as climate-unfriendly as writing a Twitter thread on how bad it is.
So going specifically at crypto as the tipping point for climate might in fact be damaging for. As in the case of Klima, a climate-neutral way of storing value is possible, and it can be swapped for tokens on Polygon that have more use as actually currency. There is no reason for more cryptocurrencies to not take up this model if there is a demand for it and if people actually bring it up rather than dismiss the whole industry.
People criticising crypto for being the climate destroyer are speaking of older forms of crypto. Like it or not, it is a form of payment which is becoming more and more popular. Cryptocurrencies have unofficially replaced the national currency in Lebanon due to inflation. People are using BTC to pay for everyday goods as it is more reliable than the Lebanese pound.
In cases like this, only the privileged can talk of climate issues when people’s livelihood is depending on it (yet opinions from self-proclaimed humanitarians come left and right). But the argument here is that only the popularity of BTC has made it possible. Basically, it has been good marketing that has given an opportunity for people to work around a desperate situation.
Looking at the big picture, it needs to be understood that it’s not just black and white. Yes, some cryptocurrencies are devastating to nature and when we have the luxury to choose we should avoid using them. But we should keep talking about these aspects more. Finding information about greener crypto options is hard because the main narrative being pushed is that it’s impossible to have a greener or even climate neutral crypto. This is devastating to the market when crypto has the potential to become even greener than paper money or debit cards.
Take a look for example at Tezos – a proof-of-stake token that can be mined on a Raspberry Pi:
According to Tezos-Nodes, there are around 400 bakers (nodes) on the Tezos network at the time of writing. Even if this number had to 100x (around the same node count as Ethereum) to provide enough capacity to serve the world, it would still be a truly insignificant amount of electricity used.
Some people also argue that it’s not real money and is imaginary profit. But isn’t it all? It’s like arguing that vegan sausage is not real sausage but ignoring the fact that people choose this alternative. Soy milk is not as nature and animal friendly as we originally thought so we can talk about greenwashing.
But in case of crypto, the assumption by default is that it isn’t as nature friendly as it sometimes is or has the potential of being. In the example of Arweave we can’t talk of greenwashing when the entire mining model is deconstructed and made in an entirely innovative way to be sustainable in terms of resource usage.
So just like any industry, we can’t stop it but if we want to make a change we need to keep them accountable. This starts by educating ourselves on how the greener options work. For instance, Arweave uses less resources when mining its token.
By making data storage permanent, Arweave also moves towards climate friendliness by using less resources to pay for storage. So not only is the currency mined in a more nature friendly way but the whole ecosystem works on a more nature and economy friendly model. In essence being more economy friendly is also being more friendly to the climate.
If you were to buy monthly storage for, say, Google Drive, you’d need to use recurring payments. As we know, no payment method is climate neutral, as any will use resources that are unfriendly to the environment. Arweave makes a solution where using an unfriendly resource is not happening on a monthly or yearly basis but rather a one time purchase is made.
Besides this makes you actually own your own data unlike in cases with monthly subscriptions where you rent your data back from corporations. So Arweave gives you greener alternatives to permanent storage, using a greener way to pay for it in the way the token is mined and in the payment model itself.
Use cases aside and focusing on the raw mining part of Arweave: what makes mining AR different from any other proof-of-work chain is that the work being done is actually useful. Miners are running lightweight hash functions to find and index files, and the real ‘proof’ the network requires is that the requested file is actually being stored on the miner’s machine.
“[When mining AR, the CPU power needed] is minimal. The proof right now is a minimal proof of storage, and the greatest thing is that since we have a concrete proof of a concrete action, it’s possible to improve it until perfection because we wont have a giant group of miners taking the protocol hostage – their ASICs are useless”, JF, Arweave ecosystem developer and creator of arweave.app
Knowing how to support crypto that’s better for the environment, being informed of the options and selecting the greener ones (over BTC as currency or Google Drive as storage), is what moves the market towards a more green and climate neutral solution. Demand makes the market, not only the other way around. We are not at the mercy of one option to pick from – the market consists of countless coins. If you can buy one named after a meme dog or one literally called PooCoin, it only shows that the market is expanding in all directions. The question is which one to pick and which one to push in the right direction.
Similar to the way DAOs work, we have a say in the market and which direction it goes and we should use it well. People will have their prejudice of what crypto is, what it is for and judge it more harshly than equally climate damaging things that are more commonly used by nearly anyone. The solution, as always, is to adapt, grow and evolve.
In essence, we can’t make a change by slandering cryptocurrency with arguments way past their expiration date. We can’t make informed decisions if we are not informed. The only genuinely useful debate can happen if we know what we’re talking about, keeping up with the news and developments. And only then can we actually accomplish anything. Because let’s be real – just like anything in the progressive world, crypto isn’t going anywhere so all we can do is make it accountable.