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March 2021 | What does Bitcoin have to do with climate change?

I'm a mere commoner looking to make climate action easy for commoners like me. And Bitcoin... feels like the opposite of peasant knowledge. However, the climate movement would have looked so different if we were all proactive about curbing emissions 30 years ago, so I'm being courageous and breaking down the planetary impact of Bitcoin for you (tbh, for me).

I'll explain the bare minimum of what you need to know about Bitcoin/cryptocurrency, but I'll mainly focus on the pros and cons of what people are saying.

First, some Soapbox resources, events, and opportunities:

  • EVENT - open to all & free for members | What's in your fridge: a food-waste free meal planning session, personalized for the ingredients you already have at home. I'm co-hosting this with a professional chef, entrepreneur, mom, and early Soapbox supporter. If you have kids, bring them to the event to be your helpers! March 18 @ 5-6pm PST; RSVP here

  • ARTICLE | Q&A with Amanda McIntosh, creator of the Mitty. Learn about Amanda's quest to create the most functional and earth-friendly replacement to skincare wipes and cotton balls and how "green"-branded stuff can be misleading.

  • COMMUNITY | You can get the event free and also get discounts on sustainable product replacements by joining our community beta. I am seriously so nervous/excited to see how quickly our 50 slots get filled.

Fight climate change in a way that works for you.

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"Making social change always felt so overwhelming until I started reading this newsletter." - Meghan Mehta, Google

🎯 Action step 1 of 4: READ — Let's start by looking at a few articles together.

Read | What is Bitcoin and why does it matter?

For today's reading, you can choose this academic paper (surprisingly easy to understand) or this BBC article (much easier with less detail). If you don't have time, I've got you covered on the basics.

What the heck is Bitcoin?

Bitcoin is a type of cryptocurrency. Here's a cryptocurrency explainer for kids (I needed it), but the basic idea is that it's a secure, verifiable, digital alternative to cash money.

All you need to know for today is that the "verifiable" part of crypto is what makes it relevant to sustainability.

Why does it matter to climate change?

You acquire Bitcoin by "mining" it digitally. Let's use gold as an example — gold miners had to expend time, money, and energy to find and extract hidden nuggets.

Now lets imagine that the tools used to mine and verify the legitimacy of the gold consumed more power than your house, and the more gold you mined, the harder your miners had to work, and the more energy they consumed.

Bitcoin matters to climate change because it consumes a huge amount of energy, and the energy per transaction will continue to increase.

How bad is it, really?

From the sources above and a few more linked, here are some quick facts:

  • A single Bitcoin transaction expends enough electricity to power the average US home for three weeks (The Phoenix/Digiconomist)

  • In Iceland more energy is likely used mining Bitcoin than for combined household use (Fortune)

  • Most electricity used to mine Bitcoin comes from fossil fuels, Bitcoin produces 37 million tons of carbon dioxide annually (same as the country of Switzerland) (The Phoenix)

  • If Bitcoin was a country, it would be in the top 30 energy users. It's exceeded Argentina - yikes

  • The top 0.01% holders of Bitcoin have 22x the combined Bitcoins as all the rest of us combined — it could be a bad income inequality multiplier (Eric Holthaus & Bitinfocharts)

Is it all bad?

I'm honestly still grappling with this, but the most compelling argument in favor of Bitcoin is that people want to make money off of it, existing energy is too expensive, so it incentivizes the production of solar energy. I'll share sources when I find something more credible than blog posts.

My take (for now) is that Bitcoin is net negative, but there are so many other types of cryptocurrency like Ethereum acknowledging the planetary impacts of crypto technology and surfacing solutions. I need to learn more about why people are obsessed with Bitcoin and only Bitcoin when it seems like there are "better" cryptos out there. Stay tuned (or tell me the answer)!

🏁 Checkpoint: This is the end of action step 1 of 4: READ.

🎯 Action step 2 of 4: LISTEN — we'll watch a short video or listen to a podcast to further expand on our topic.

Listen | Why exactly does Bitcoin use so much energy?

Two things stood out from the questions I received this week:

  1. It's still confusing how Bitcoin & blockchain (the technology it's powered by) actually works
  2. We want to know if all cryptocurrency is bad for the environment and if there's better alternatives to Bitcoin

My goal this week is to give you enough crypto knowledge to truly grasp its climate implications. I'm going to link and summarize one ~2 minute video for each question.

Video 1: Blockchain quick explainer

  • What is blockchain: Blockchain basically describes a database where records are decentralized, distributed, and secure. Bundles of these records are called "blocks" and they're submitted in chronological "chains". Cryptocurrency is the most well-known application of this tech.
  • Why blockchain: It theoretically powers an uncheatable system where records can be stored, facts can be verified by anyone, and security is guaranteed.
  • What makes it different: Blockchains store info and records across a network of personal computers. No one company owns the system (e.g. unlike Amazon's AWS servers), so it's hard to corrupt.

Video 2: Bitcoin & cryptocurrency validation

  • TL,DR: Cryptocurrency (digital currency verified on the blockchain) can theoretically be verified in two ways: proof of work (PoW) and proof of stake (PoS).
  • PoW is a huge energy suck. Verifying a single transaction with proof of work would use the same amount of energy as 1.5 American households do in a day.
  • What is PoW: New Bitcoins can only be released through a process called mining, verified by PoW. When you mine Bitcoin, what you're actually doing is competing with other miners to solve complex mathematical puzzles to verify the legitimacy of the transaction. The puzzles require enormous computational power to solve, and the first person to successfully verify gets rewarded with $. The puzzles get harder and harder the longer Bitcoin is around, consequently consuming more energy. Yikes!
  • What is PoS: Instead of using an energy-sucking puzzle, proof of stake decides that the creator of a new "block" is chosen from a pool of users who have staked some amount of $.

🏁 Checkpoint: This is the end of action step 2 of 4: LISTEN.

🎯 Action step 3 of 4: ACT — Now it's time to do something. Let's go!

Act | Choose your own adventure: crypto edition

A little bit of context before we dive into today's actions: you'll see the acronym "NFT" thrown around. It's a little different than Bitcoin (quick overview article here and 5-min video here) but the issues are the same, so I'm not going to explain further.

Below are 3 levels of actions you can take based on how familiar you are with blockchain/crypto/Bitcoin/NFTs. Choose a level and get started!

  • 💡Level 1: Share a resource on Bitcoin on social media/with your coworkers.

    There isn't enough awareness about the planetary impact of Bitcoin. Share our Soapbox summary for something simple or this Earther article on "How to Fix Crypto Art NFT's Carbon Pollution Problem" if you have a more tech-oriented audience.

    Copy/paste this into LinkedIn or Twitter (and tag us so we can reshare): Soapbox Project sends me weekly bite-sized climate action plans. This month, we've been learning about the ecological impact of Bitcoin which now consumes more electricity than Argentina! Read more about the problems/solutions of Bitcoin & crypto: [copy your chosen link]

  • 🌅Level 2: Get involved with policy change.

    Join your local Sunrise Movement chapter (USA) and/or join Climate Changemakers. If you're outside the US, get involved with Fridays for Future — they have a global map to guide you. Bitcoin is just a symptom of our fossil fuel reliance and we need to tackle the root of the problem via climate legislation.

  • 💻 Level 3: Join the Clean-NFTs Developer Community.

    Here is a spreadsheet of developers working on cleaner blockchain tech. There's a link to a Discord community at the top of the page. If you're really into crypto and want to make a planetary difference, this one's for you.

Bonus: If you're an energy researcher OR a developer creating open source solutions, you could win a bounty for researching/creating a more ecologically friendly token. What a time to be an eco-friendly bounty hunter.

🏁 Checkpoint: This is the end of action step 3 of 4: ACT.

Before we go any further, it's time for you to pledge your commitment. It takes less than 30 seconds to pledge and we can bother you about it in a friendly way, so we can hold each other accountable. Pledge here!

🎯 Action step 4 of 4: REFLECT — what can you commit to? What fresh perspectives can we look at?

Reflect | Can bitcoin's daddy save us?

For our REFLECT module, I'm sharing something sent in by a reader (thanks Tiffany!) on the positive aspects of blockchain tech.

This case study comes from Provenance, a platform empowering brands to make the sourcing and impact behind their products transparent. Their blockchain story takes place in the Indonesian fishing industry, where slavery and human rights abuses are rampant. Get the full case study here.

Quick note: if you're reading the case study, you might benefit from starting at the bottom — there's a glossary of definitions.

4 highlights on using blockchain for social & environmental sustainability:

  • 🎣 Problem: Indonesian fishermen operating responsibly are not rewarded for their efforts. For example, small-scale "pole and line" and "handline" fishermen (more sustainable) can lose out to larger vessels that may be fishing illegally and possibly with forced labor. With no rewards, what's the incentive to continue operating responsibly?

  • 🐡 Problem: Transparency is being called for — it's also hard to obtain. Customers, governments, NGOs, and businesses at the end of the supply chain want to know what's going on in earlier stages, especially when they need to meet regulations or prove that they're sustainable. It's extremely difficult for one (1) org to be in charge of supply chain transparency. Plus, this org would be the one point of weakness. Uh oh bad news bears.

  • 🐠 Solution: Provenance piloted blockchain technology to verify the fish and seafood supply chains in Indonesia to trace the products, parts, and materials. Their goal was also to ensure reliability of human rights, environment, and health and safety claims. Bonus points: they made it work with existing devices local fishermen used, so it wasn't this big flashy undertaking forcing people to get used to new technology.

  • 🐟 Solution: Blockchain could "share the same truth between all stakeholders - fishermen, factories, certifiers and consumers, without giving any of them a backdoor to the system". Yay verified + transparent supply chains!

My biggest takeaway: I'm concerned that Bitcoin's negative planetary impact will give blockchain tech a bad name. This case study has really powerful implications — imagine if we could do the same for fashion company supply chains, food, and more! We would finally be able to see what really goes on, prevent human rights abuses, and know which companies are truly radically transparent without relying on their word.

That's it for today — this wraps up our Bitcoin content for March! I'm going to do a quick video recap for our community of everything we covered this month. Hope to see you there.

🏁 Checkpoint: This is the end of action step 4 of 4: REFLECT.

Check out our membership community for more resources like free weekly events with social justice experts, sustainable product discounts, pre-written email templates, a social impact job board, and in-person hangouts with new friends. Thanks for taking action with Soapbox Project!

Fight climate change in a way that works for you.

💌 Thinking about sustainability can be overwhelming after a busy workday, so we're here to help. Join over 5,000 other busy people and subscribe to Changeletter, a bite-sized action plan that'll take you 3 minutes or less to read every week.
Headshot of Ash Borkar (a woman with glasses and a cardigan)
"The info is always timely, actionable, and never stale." - Aishwarya Borkar,
Headshot of Meghan Mehta speaking at Google with a microphone in her hand
"Making social change always felt so overwhelming until I started reading this newsletter." - Meghan Mehta, Google