Proof-of-stake is most touted for its much lower energy profile than proof-of-work. Altcoin uses it; Ethereum is switching to it; Bitcoin may or may not ever make that transition. These choices tend to be values-based. Proof-of-work’s original claim to fame was as a solution to the problem of double spending, where the same coins could be spent twice, destroying the integrity of the currency. Adherents to proof-of-work over proof-of-stake cite the importance of Bitcoin’s long-running stability across years of worldwide usage. Proof-of-stake is newer and less widespread; it’s impossible to declare it equally reliable yet, though it seems plausible that it might be. If so, the energy reduction would be worthwhile.
Rather than asking in isolation how much carbon emissions decentralized web technologies create, many re-frame to draw a baseline. They ask, how do emissions from cryptocurrencies compare to emissions from traditional banking?
I haven’t come across a truly excellent breakdown of ecological accurate cleaned numbers list from frist database cost for cryptocurrencies versus centralized banking, or even a hint of an attempt to compare emissions per dollar equivalent. However, there does exist some good comparative discussion, both of the costs of the two industries and of the value they provide (here’s an article from NASDAQ, for example).
I’m pleased to see the discussion. Cryptocurrencies are in many ways a practical protest against the power and control of traditional banks and government control. If the aim is to disrupt and displace, it’s important to compare the impacts of the two industries.
There’s much to critique in traditional banking. Quite apart from the ecological costs of day-to-day business, fossil fuel divestment has been a critical strategy of the climate movement, whether at the university endowment level or the personal ask to stop using Wells Fargo in response to their financial involvement in the Dakota Access Pipeline. People argue from both ecological and justice perspectives that disruption of traditional banking is a net positive. Others accept the ecological cost of decentralized finance tech as worthwhile, even if only for the trust and security of a chain of provenance.
When we create something new, we hope to make a meaningful improvement. We hope at worst that the cost of our prototype yields something worthwhile: an important learning. It should encapsulate a way of thinking that is different, in some critical way, from what exists. I remain attracted to the decentralized web space because I see so many people in it who are both thoughtful and taking action. People are reading books about power, about money, about justice, and making new protocols — both technical and human — that seem like they could fundamentally change the way our world works, and the way we work together within it.