Experts weigh in on environmental cost of crypto

Posted: 8 September 2021 2:00 pm
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The environmental cost of crypto is a hot topic, often debated. Is it churning through resources faster than comparative industries or is it just a drop in the ocean?

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The environmental cost of crypto is a hot topic, often debated. Is it churning through resources faster than comparative industries or is it just a drop in the ocean?

I'm not about to claim I know the answer, and few people would. However, Finder has partnered with CFD trading platform City Index to bring you insight from 5 Australia-based experts.

Tony Sycamore, market analyst, City Index

With more than 20 years' experience in market analysis, including stints at Macquarie, Goldman Sachs, and CBA, City Index's Tony Sycamore is a trusted voice within Australia's investment community. He said crypto is trending towards greener operations.

"Much of the [Bitcoin] mining industry is located in China, which generates most of its cheap energy from coal, raising severe environmental concerns. However, a decision by China in May to expel many of its miners resulted in some relocating to countries or regions that offer energy at competitive prices coming from renewable sources or offset by carbon credits," he told Finder.

"High-profile industry personalities such as Elon Musk are also pushing the need for the industry to source energy from renewable sources. With the trend towards ESG investing gaining speed globally, the energy-intensive cryptocurrency industry must keep pace to ensure widespread adoption. The trend towards renewable energy sources is expected to continue."

Tony Sycamore

Blake Cassidy, CEO, Bamboo

Formerly the COO of sustainable tech firm Matter, Blake Cassidy now heads up crypto micro-investing app Bamboo. He told Finder that the rewards of crypto inevitably come at a cost. In this case, it's the energy required to facilitate crypto-related operations.

"In many regions that are facilitating blockchain networks, there is a heavy reliance on fossil fuels to generate the energy required which is where the bad rap on Bitcoin is coming from." However, Cassidy says the industry is trying to overcome that negative reputation.

"It's no secret that the market genuinely cares about our collective carbon footprint and is taking steps to nullify the impact we're having on the environment," he said. "We've already seen some of the major bitcoin miners innovating to improve the greenness of their energy, and as we move forward I have full belief this will be an ongoing trend."

Blake Cassidy



Jeff Yew, CEO, Monochrome Asset Management

Monochrome founder and former Binance CEO Jeff Yew is one of the most prominent crypto figures in Australia. He told Finder that there are environmental benefits woven into crypto since it creates demand for stranded energy.

"The Bitcoin mining industry has emerged to become the bidder of last resort for stranded energy. By presenting itself as a solution, it highlights the inefficiencies of the energy production sector far better than any environmentalist movement we've seen," he explained.

Yew also urged critics to consider the benefits of crypto before condemning its energy consumption.

"The industrial revolution wasn't called off 'because it was bad for the environment'. The Internet wasn't shut down because it was 'bad for the environment'. Same for Bitcoin, one can't just criticise the cost of an action without understanding its benefit for humanity."

Jeff Yew

Jeremy Britton, CFO, Boston Trading Co.

With 25 years' experience in financial planning and financial markets, Jeremy Britton has developed a keen interest in cryptocurrencies and other innovative technologies. He said pundits often cite claims that mining Bitcoin uses more power than the Netherlands or Iceland, but the comparison isn't a fair one.

"The Netherlands and Iceland are tiny nations, whereas Bitcoin and crypto are worldwide financial networks," he said. "The environmental argument would carry more weight if one could compare the energy use of cryptocurrency versus the power use of every bank, branch, ATM and all systems for printing, transporting and issuing cash."

Britton also said that it may be possible for cryptocurrencies to replace 40–60% of the "power-hungry systems" which are currently in use, thus improving the environmental impact of financial services.

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Adam Garcia, founder, Stock Dork

Adam Garcia has been a thought leader in the financial markets for over a decade - he says that while steps are being made to improve the environmental impact of crypto, issues remain.

"The US has pushed for using renewable energy in Bitcoin mining, with 50% of Bitcoin mining now powered by renewable energy," he told Finder. "This might sound like it is case closed, but there is a caveat in that this solution only shifts the problem. By gulping up excessive amounts of renewable energy through crypto mining, it creates a shortage on the grid which in turn is covered by fossil fuels."

Adam Garcia

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