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We must take environmental concerns seriously

While the media’s portrayal of crypto’s environmental impact is often misleading, the industry still has a responsibility to take these concerns seriously.

14 Sep 2021by Ivan Soto-Wright

In light of MoonPay’s ambitious mission to bring crypto to the next billion people, I'm often asked about the impact this will have on the environment. The media is daily churning out stories that paint a near apocalyptic picture. Headlines like “Why Bitcoin is bad for the environment” and “NFTs are destroying our planet” abound. Some have called Bitcoin a “dirty currency.” For the casual observer, there’s no debate: crypto harms the planet and to support it is to be complicit in environmental degradation.

Forget the countless ways that crypto is transforming the way we bank and do business. Put aside how blockchain technology is fundamentally changing how we hold governments and legacy institutions accountable. The impact of crypto on the environment, considered on its own, simply isn’t what the doomsayers would have us believe.

When we talk about crypto’s environmental impact, what we really mean is mining, the energy-intensive means by which a blockchain ledger is maintained. Mining is the real culprit here, and critics are right: mining does use a lot of energy. But as Bitcoin expert Andreas Antonopulos has pointed out, to argue that this energy usage is excessive per se would be like arguing that electric cars harm the environment more than gas-powered cars because the coal-fired electricity plants that run them use more energy. This, of course, is a fallacy: it conflates energy production with energy consumption (which, for gas-powered cars, includes the distribution of oil across the world and the emissions of billions of vehicles). Mining does use a lot of energy, but purely at the level of production—energy usage does not increase linearly with consumption. Companies like ours, which facilitate crypto payments, are more like the tires on a car rather than its exhaust fumes.

But still, mining does use a lot of energy at the level of production, so how do we address that? Miners aren’t oblivious to their carbon footprint and have long made efforts to move towards renewable sources of energy. This isn’t just out of the goodness of their hearts—since mining can happen anywhere in the world, it’s well-suited for renewables. CoinShares’ Bitcoin Mining Report predicts the Bitcoin mining industry will soon be heavily driven by alternative energy sources such as hydro, wind, and solar. It currently estimates that the proportion of renewable energy used by the industry is already four times the global average energy mix.

Of course, these counterarguments shouldn't be taken too far. Many crypto proponents are quick to wave aside environmental concerns by pointing out that crypto’s energy usage pales in comparison to other essential services we use in our everyday lives. Bitcoin mining consumes less than one-fifth of the energy that banks and ATMs do, for example.

These rebuttals are overly dismissive. Notwithstanding the media’s tendency to exaggerate and sensationalise, environmental concerns must be taken seriously. The industry has a long way to go, and its impact—not just on the environment but on society as whole—must be constantly interrogated.

Nevertheless, there are good reasons to be hopeful. The future of cryptocurrency will be cleaner, partly because there will be a shift to proof-of-stake mechanisms like ETH2, which don’t require high-cost computational problem solving. There will also be many breakthroughs in the next decade that will help us use crypto as a vehicle for environmental initiatives. A 2019 HSBC report details how issuing Green Bonds on the blockchain, for example, could scale this relatively new asset and therefore significantly increase the number of green projects. As the space continues to mature, it is my hope that we can have thoughtful and sometimes difficult conversations regarding the future we wish to build.

MoonPay will continue to work to improve each and every day to bring crypto to the masses, ignoring the noise when necessary and moving the needle where it matters most. We have some of the smartest and most ambitious people in the world devoting their lives and careers to this new and exciting technology, and we’re proud to play a role in leading the way.

As part of our ongoing effort to minimize our environmental impact, we’ve pledged to be carbon neutral by 2025—an ambitious goal that we’ll achieve by offsetting unavoidable emissions and investing in measures to reduce our carbon footprint. We’ve already begun taking steps in this direction by ensuring our energy consumption is powered by renewable sources, and, as a remote company, we’ll always remain 100% paperless. These efforts are just a start, however, and we’ll continue to look for ways to be greener.

Although crypto is not the environmental bogeyman it’s often made out to be, that doesn’t absolve the industry of its responsibility to do its part. We must take environmental concerns seriously—it’s the right thing to do.