ECB Studies Environmental Impact of Banknotes, Draws Parallels with Crypto Mining
Summary:
The European Central Bank (ECB) has conducted a study on the environmental impact of banknote usage, identifying 16 categories. The major contributors include ATM usage and transportation, with initiatives underway since 2004 to reduce this environmental footprint. The study used European Commission’s Product Environmental Footprint methodology, comparing it favorably to Bitcoin mining. The article also mentions the potential environmental benefits if crypto miners utilize the by-products of fossil fuel production facilities and stabilize energy grids.
The European Central Bank (ECB) has conducted a study exploring the environmental effects associated with the use of paper currency. The research identified 16 categories impacted by the environment, including energy efficiency, a concern minutely scrutinized in the context of cryptocurrencies. Paper currency remains the preferred mode of payment at points of sale within the Eurozone. The production, distribution, and ultimate disposal of physical money necessitates a complex network of physical infrastructure, all of which leaves an environmental footprint.
According to the ECB, the major contributors to the environmental influence of paper currency are ATMs, accounting for 37%, closely followed by transportation, which contributes 35%. The rest comes from various steps such as processing, manufacturing of paper, authentication among others. Since 2004, the ECB has been making concerted efforts to minimize the environmental impact of paper money. The report by ECB elaborates, energy consumption by ATMs has already seen a drop of 35% between 2004 and 2019, even though the number of ATMs has significantly risen. Further reductions in transportation's impact are also being looked into.
The research used the Product Environmental Footprint (PEF) methodology, devised by the European Commission, and concluded that the average environmental impact by every citizen of the Eurozone from cash usage amounted to 101 micropoints annually, akin to driving a car for 8 kilometers (4.6 miles). The average total impact for a citizen of the European Union was pegged at over 1 million micropoints, or approximately driving a car twice around the Earth. These calculations were based on data from 2019.
Interestingly, these figures compare favorably to the environmental impact of Bitcoin mining, the extent of which, is said to be equivalent to millions of water-filled swimming pools. Nevertheless, the efficiency of crypto mining is improving quickly, and its ability to decrease its environmental impact is proceeding at a rapid pace.
Additionally, crypto miners could offer unique environmental benefits if they opt for them. Mining establishments can be conveniently built on fossil fuel production locations to utilize by-products. Crypto miners have even been established at landfills to draw methane, and they possess the ability to stabilize energy grids. A report suggests that environmentally conscious consumers prefer transparency in supply chains facilitated by the blockchain.
Published At
12/13/2023 12:30:00 AM
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