As cryptominers take aim at climate action, critics call it greenwashing

Volatility and climate toll

Cryptomining is facing increasing scrutiny of its climate impacts.

Concerns mainly center around the process of bitcoin mining, which uses a system called “proof of work.” It is energy-intensive by design, requiring computers to solve thousands of equations as quickly as possible in hopes of solving the correct sequence to earn bitcoin.

A 2022 Biden administration report stated that the industry consumed about 1% of the electricity used in the country, and produced between 25 million and 50 million tons of carbon dioxide annually.

Like data centers, crypto mining also uses water as a coolant and flows through computers every year. The same White House report stated that crypto mining was responsible for the production of e-waste equivalent to that produced by the entire nation of the Netherlands.

But some cryptominers have innovated and pushed back, arguing that the industry has the ability to do better for the planet.

Jørgensen is among them. He has been involved in the bitcoin mining industry for two and a half years, starting as a contractor. Now he is gathering investors to launch GeoBitmine, which he plans to set up in Idaho Falls this spring.

Jorgensen refers to GeoBitmine as an “agritech company” rather than a bitcoin mining operation. He said his focus with most of the five-acre facility is to build a greenhouse heated by the servers working to mine bitcoin. It can initially employ at least 30 people, he estimated.

In short, he said, he wants to expand the mission of bitcoin mining.

“I’m a practical guy who wants to solve problems and do it in the simplest possible way,” he said. “We have problems with water consumption, food production, and our energy grid needs to be stabilized. I found an opportunity where all these things can be put together.”

GeoBitmine aims to be carbon neutral by the end of 2023, Jorgensen said. His plan relies on a combination of a 75% renewable power supply provided by PacifiCorp; energy savings by reusing server heat through the greenhouse; and carbon sequestration through the crops grown in the greenhouse.

In response to questions about the value of using so much energy to mine bitcoin, Jorgensen points to other uses of electricity such as Netflix streaming, which according to a 2020 estimate uses about 94 terawatt hours globally each year.

“You just become prejudiced against something that uses less than 1% of the grid,” he said. “People fear what they don’t understand.”

Salcido, CEO of Salcido Enterprises, has seen many mining operations rise and fall as the value of bitcoin fluctuated wildly during his 10 years in the industry, justifying the caution of utilities and policymakers.

Given the ongoing volatility in the industry, Salcido said, he doesn’t blame utilities for setting higher prices for crypto customers to protect their assets, or lawmakers for being cautious. He believes it is too early for crypto miners to try to burn their environmental information into the minds of the public.

“True sustainability requires a lot of strategic, thoughtful planning and execution, not meandering,” Salcido said. “That, combined with the fact that crypto as a new, emerging, developing industry has a get-rich-quick quality, means that most people don’t see it as sustainable. And in these early market cycles, it’s not acting sustainably.”

With time and experience, he still believes that it can be like this.