The Economic and Environmental Impacts of Bitcoin Mining

zigzagpod
former aluminum plant via ZigZag podcast

The folks at ZigZag podcast have been reporting a series of stories about a bitcoin mine up in The North Country of New York State. The mine they are reporting on sits on the Moses Saunders Dam on the St. Lawrence River. This dam, built in the mid 20th century, attracted companies like GM and Reynolds Aluminum to build and operate factories there. Today these factories are being converted to bitcoin mines which on the surface seems kind of cool, but it’s worth a deeper look.

Economic impact. Bitcoin mines extract an insane amount of value for their owners. But as for labor, its computers that do most of the work in the mines, not people. This means that the job numbers that come with these mines aren’t as high as they were with aluminum plants. Even though we know we are in the age of automation, there’s some confusion in how town and city officials negotiate deals with incoming mine operators because they, the officials, have a hard time understanding bitcoin.

Here’s an idea for these folks: since the “new job” numbers are likely to be low in this sector, explore other options for extracting value from the mine for people in your town. If it’s not jobs, what is it? A one time expense for the mine, like a community baseball field, might not be the best fit. Look for ways to extract value over the lifetime of the company in a way that paychecks do.

Environmental impact. Mining bitcoin is energy intensive. Much more so than producing physical goods. However, this impact is something that most of us don’t think about because bitcoin and other crypto goods are digital and seem abstract. But make no mistake, the impacts they have on the physical environment and human health are real.

There is some hope if we use a triple bottom line lens for crypto. Triple bottom line considers economic, environmental, and social impacts of business activity. There are some experiments that use crypto to track the environmental and economic impact of its use, then use that data to make it better. But this innovation will only happen if we choose to do make it a priority. In the meantime, let’s be wide awake about the systemic impacts of bitcoin and other digital goods.

 

TAKE IT FURTHER

Energy cost of ‘mining’ bitcoin more than twice that of copper or gold
(The Guardian, Nov 2018)

on streaming:
Greenpeace says binge-watching all those TV shows is bad for the environment
(Quartz, Jan 2017)

a call for innovation:
Cryptocurrency mining could become the new face of energy storage
(World Economic Forum, Sep 2018)