(9 November 2022 – Australia) While businesses increasingly prioritise sustainability, cryptocurrency’s potential harmful environmental impacts could be an increasingly heavy barrier to socially responsible adoption according to PwC, but exactly how bad is crypto’s environmental footprint?
PwC reports that the White House recently revealed its first ever executive framework for managing the opportunities and risks of cryptocurrency. Whilst cautionary tales relating to fraud and theft get their expected due mention, it is notable to observe that natural capital took up its fair share of focus.
A single transaction of the world’s largest cryptocurrency, Bitcoin, has been estimated to emit the same amount of carbon dioxide (CO2) as an average family does in three weeks or that required to power all the tea kettles in the United Kingdom for two decades.
The world’s second largest cryptocurrency, Ethereum, announced it was set to cut its energy consumption significantly in a development called ‘The Merge’. This could offer a pathway for other cryptocurrencies to become more environmentally friendly and significantly strengthen the case for adopting these technologies into a sustainable world.
“If the environmental effects of the Merge play out, or indeed renewable energy becomes the main source of powering blockchain generally, it may give green conscious businesses and consumers cause to re-examine opportunities for crypto integration” stated PwC Australia Associate Consultant, Charlie Thaxter.
“Importantly, as Proof of Stake requires less specialist hardware and computing power, it can be significantly scaled without producing exponentially greater environmental damage. There is still a ways to go. Regardless, business leaders and consumers should watch the outcomes of The Merge and other blockchain claims closely. If the anticipated benefits are realised and expanded across other blockchain validation methods, it could help open up the door to greater adoption and a greener planet” Thaxter added.