Change the Code, Not the Climate

Imagine a digital asset that requires so much energy it needs to bring dirty fossil fuel power plants back online, never mind the harm to nearby communities with air, water and noise pollution.

That’s often the cost of successfully “mining” bitcoin. The backing of one of the country’s largest U.S. mutual fund companies definitely helps.

Bitcoin, the top cryptocurrency by market cap, has been bolstered by Fidelity Investments, despite its acknowledged impact on the climate. Bitcoin uses a highly energy-intensive process known as “proof of work” to validate transactions and generate cryptocurrency.  

In the U.S., bitcoin causes as much climate pollution as that caused by burning the diesel fuel used by our railroads. It already uses as much electricity as all our home computers or residential lighting. 

Electricity demand by comparable sectors hasn’t increased the same way and, in some cases, has even declined.

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Fidelity began mining bitcoin as early as 2014. The company offers its clients the opportunity to focus their accounts on environmental, social and governance principles, which can include deliberately avoiding investments in companies or funds that harm the environment. 

Bitcoin mining that’s hooked up to a majority-coal-powered grid, as it is in Kentucky, or generated by the revival of a once-shuttered coal-fired power plant turned natural gas – and others like these that flout the demands of addressing the climate crisis – do not qualify as “clean” or “environmentally friendly” investments. 

Those labels are misguided – clear examples of industry greenwashing. 

That’s why we’re calling on Fidelity to end its support for dirty investments in proof of work bitcoin, which only contributes to the climate crisis.

This change would bring much-needed relief for communities in states across the country that have suffered some type of blight because of the arrival of bitcoin mining operations.

As we chronicle in an upcoming exclusive series, bitcoin mining has harmed communities across the U.S., including in Montana, Kentucky, New York and Georgia. These operations have made life miserable for its closest neighbors. 

The environmental and health effects of these cryptocurrency mining operations may differ. But the effects have in common is the fact that harm to local communities is preventable. 

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The enterprising bitcoin community must acknowledge the negative impact of their proof of work process and commit to developing a much more efficient process, such as the “proof of stake” concept that the second-largest cryptocurrency, ethereum, recently switched to using. 

Changing the code is possible, but it takes the will of a community to make changes that will help real people.  

Bitcoin and the proof of work process were innovations. The industry has already shown its ingenuity and ability to evolve. And that’s what’s needed now.

That’s why we’re urging support for two ways to bring about needed change:

• Change the code, not the climate: The bitcoin community must tap into its ingenuity and shift from proof of work to a process that does not contribute to increased greenhouse gas emissions.
• Call on Fidelity to stop mining bitcoin and to inform their investors of the environmental harms associated with bitcoin and other proof of work digital assets.