Can crypto be good for the environment?

There’s actually a little more hope here than you might think.

If we decided to sit down for a second and play a word association game, it could go a little like this: crypto, blockchain, bitcoin, stupid tech bros making things because they can and not thinking about how it’s contributing to the climate crisis.

But is that strictly true?

Well, that’s what we’re looking into here. See, there are a lot of articles floating around, criticising crypto and its impact of the environment. Whether you’re finding your crypto-news at The Guardian, the New York Times, with us lovely lot or sci​ence​.how​stuff​works​.com, crypto is a big, big world (even if it’s not being used by most people just yet). So there are projects most media sources overlook, and there are constantly new crypto projects being made.

All in all, it’s a bit of a headache. But, hey – that’s what we’re here for, right?

The bad stuff

When it comes to the environmental impact of cryptocurrencies, bitcoin is the real shitshow for a few reasons. It’s by far the most widely used, and it uses the most inefficient form of crypto mining around. Despite bitcoin being synonymous with crypto to most people, there is a crypto world beyond bitcoin that looks a little less damaging.

This isn’t about cryptocurrencies, it’s about blockchain technology

Individual coins aren’t the driving force for how crypto intersects with real-life global warming and melting ice-caps. That’s blockchains: how they mine and their relationship with energy consumption. Bitcoin has the weightiest carbon footprint because of both volume of users and also its mining process (proof of work). Other blockchains are already using much less energy-intensive ways of operating, such as proof of stake or proof of history. Nano, which prides itself on being eco-friendly, doesn’t mine at all.

Navigating away from proof of work (like Ethereum is currently doing) into another form of consensus mechanism is one way of making crypto more sustainable (and cheaper). That, though, is still worse than this whole crypto lark simply not existing at all, from an environmental perspective. So where can crypto actually better the planet?

Here are a few ideas.

Carbon negative blockchains

Algorand is a blockchain taking things a step further. It uses a form of proof of stake in order to work, which happens to use very little energy. Add to that how Algotand donates to CllimateTrade, a carbon offsetting initiative, and you have a cheap and fast blockchain that is also carbon negative. It’s also the blockchain behind the CBDC digital currency used by the Marshall Islands.

Crypto tokens as rewards for doing good stuff

You might know that in Finland, there’s a big culture of recycling bottles and cans and getting money back. You put that empty Lambrini in a machine, it scans the label, out pops a little receipt.

This idea could be applied to crypto, giving you essentially the same transaction but digitalised (and therefore more convenient) – while also giving you access to the possible passive income streams that crypto tokens allow for interest, general value increase and more. And it wouldn’t just need to be bottles. It could be across anything from recycling to picking up litter to clocking miles cycling instead of driving.

Using carbon-negative blockchains’ smart contracts to make other companies better

This might sound at odds with the whole everyone is anonymous” aspect of blockchains. But they can actually be used very well when it comes to traceability and transparency of products. When people use a blockchain, it stores data, and part of that data (what something is and where it’s going to, from where) is accessible to anyone who wants to see it. Whale Alert is a popular tracker of large and interesting transactions, for example.

The idea is that this technology could be provided to people in a way that is full and untamperable: this cotton was grown on this field, in this farm, then it went to this factory, then it was bought by this shop, then it was sold at this shop. If we were able to have this kind of information en masse from most companies, it might inform our shopping habits for the better.

If some companies had holes in their data, we could boycott them. If a company lied about its produce being sustainable, we’d know.

Smart contracts that force change and avoid political influence

Smart contracts created on blockchains like Alogrand, Ethereum, Tezos or Solana offer the world a way to have an agreement that is not being overseen by a middle man. The agreement is very secure, can’t be changed and everyone can see it. Also, it’s a smart contract, which just means that you can programme the contract to do a bunch of things autonomously.

For instance: on a £1,000,000 salary, your take home pay should be £541,161 after tax and National Insurance. Loads, but many people hide their earnings to pay less tax.

But: if a company was required by law to have a smart contract that took the tax, and people could look at a blockchain to show where that tax has gone, it would make it very difficult to dodge tax – because it’ll just happen automatically and accurately. This could, for instance, make sure that entirely made-up bazillion-quid company Bamazon” pays its fair share of taxes, which would help the planet in basically every way possible. Given the tamper-proofing of smart contracts, political influence wouldn’t be possible either.

While it might seem a little rich (and/​or incredulous) that companies will willingly be pulled into doing these sorts of things, let’s take it back to the environment more specifically.

Companies love to use the PR of being on a mission to become carbon negative”. To do this, they might be carbon offsetting. Now, if they were aware of Kilma DAO, which is a blockchain that aims to make carbon production more expensive (thus making renewable energies more financially sensible), and a company decides not to partner with them, they could look like they were trying to hide something within their goals of trying to be carbon negative.

Carbon offsetting has its pros and cons, of course, but this example shows how blockchains can hold companies accountable when it comes to helping the planet.

So there are many possible ways in which crypto could help the planet. The issue is around whether countries around the world will collectively give up their power to adopt it; whether these blockchains can operate on a global scale; and whether we can cherry-pick the best bunch of crypto projects that’ll help the planet and get everyone using them (tricky).


Without going down the second year of university hypothetical seminar debate route – because even writing that is nauseating enough – the idea of bitcoin (and other cryptocurrencies) is to create a global decentralised economy. If that was achieved, we wouldn’t be printing fiat cash all the time, and mining would be treated with a little more legitimacy.

If we compared the carbon footprint of that world with the current one, would it be more or less? Scale is a powerful thing. It’s why those massive bags of rice are better value than the cute little ones.

If everyone on the planet was using the same currency, would the energy usage be more or less than what we have right now? It’s hard to have an answer, but just maybe. And that’d be on top of the useful stuff smart contracts do and other features allowed by blockchain technologies.

Are we likely to ever implement that? Nope. Interesting, though!

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