What Could Possibly Be Worse Than Big Oil/GOP Greenwashing? Why, Crypto Greenwashing, Of Course!
“Imagine if keeping your car idling 24/7 produced solved Sudokus you could trade for heroin.” That’s how one Twitter user described the production, transaction, and utility of Bitcoin and other cryptocurrencies back in 2018. Though it’s an exaggeration, that description isn’t entirely off-base—cryptocurrencies require massive amounts of energy to be produced and used. Bitcoin has the yearly carbon footprint equivalent to the Czech Republic while producing as much annual electronic waste as the Netherlands. Those numbers haven’t stymied the contention among many cryptocurrency enthusiasts that this is a singular solution to all the world’s energy problems. “Bitcoin mining solves a number of climate issues, while also creating a more profitable model,” crypto enthusiast Anthony Pompliano wrote last August.
Many developers say they are working on cryptocurrencies that are supposed to encourage eco-friendly practices, and even tokenize carbon offsets. While these solutions sound appealing on the surface, climate and environmental policy experts are dubious they will have much impact mitigating climate change and changing our energy habits. Even though some of these projects are driven by techies with good intentions, these quick fixes and greenwashing proposals are unlikely to bring us closer to a zero-emissions world.
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The underlying economics are a form of decentralized finance which has been criticized by financial and securities experts. The code underlying KlimaDAO is based on another project, Olympus DAO, which incentivizes people to deposit assets into a treasury to increase the price of the OHM token yielding more than 7000% in annual gains. Proponents of Olympus DAO and similar projects readily admit that it may be a financial scam. In a 2021 Coindesk article, Andrew Thurman, reporter and co-founder of a blockchain startup wrote, “Yes, it’s a Ponzi scheme. But who cares?” Other projects based on this idea, built with similar code, have been hacked and had millions in funds pilfered away.
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This criticism hasn’t stopped KlimaDAO, which has now acquired more than 14.5 million carbon offsets. It was developed by an anonymous team and funded by billionaire Mark Cuban, who has been involved in previous cryptocurrency scandals. He backed an Instagram account that provided undeclared paid promotions of NFT projects—resulting in the account’s ban on Instagram. Asking users to offset the energy costs of miners is reminiscent of oil and gas conglomerates advertising individual responsibility and carbon footprints to obfuscate their role in anthropogenic climate change. Increasing the prices of carbon offsets may not be a viable solution either, given that the offsets themselves are heavily flawed.
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https://www.thedailybeast.com/how-cryptocurrencies-are-failing-spectacularly-to-greenwash-themselves