Megan Hall: Welcome to Possibly, where we take on huge problems like the future of our planet and break them down into small questions with unexpected answers. I’m Megan Hall.

Public interest in cryptocurrencies has been on a bit of a rollercoaster over the past few years. But there’s one thing that hasn’t really changed- the massive amount of energy it takes to create them. But why? And does it have to be that way? 

We had Albert Wu and Luci Jones from our Possibly team look into this question. 

Albert Wu: Hi, Megan! 

Luci Jones: Hello!

Megan Hall: So, remind me. What are cryptocurrencies?

Luci Jones: They’re digital currencies that aren’t controlled by governments or financial institutions. They rely on something called the blockchain, which is a public record of all the transactions that people make. 

Albert Wu: Blockchain makes these currencies secure and difficult to hack. 

Megan: So how do you get cryptocurrency? 

Albert Wu: It depends, but for popular cryptocurrencies like Bitcoin, you have to “mine” them. 

Megan: How do you do that?

Luci Jones: Basically, you have to solve complicated math puzzles. The first person to solve the problem gets the coin, so to be successful you have to solve these questions as fast as possible.

Albert Wu: And to do that, you need powerful computers that use up a lot of energy.

Megan: Like, how much?

Albert Wu: In the United States alone, cryptocurrency consumes a little over 1% of total U.S. electricity. That’s about the amount used by all home computers or residential lighting.

Luci Jones: And globally, crypto mining emits as much CO2 as the country of Greece.

Megan Hall: Is there a fix? 

Luci Jones: Yes! In fact, one cryptocurrency actually made a big change to reduce their carbon emissions.

Albert Wu: To learn more, we spoke to:

Daniela Barbosa: Daniela Barbosa. And I am the executive director of the Hyperledger Foundation. Which is an open-source consortium which has been working with enterprises, public sector, and the global market for blockchain based solutions.

Luci Jones: Daniela’s foundation works closely with Ethereum, the second-largest cryptocurrency after Bitcoin. It's currently worth over 200 billion dollars.

Megan: That’s a lot of money! What was this change that they made?

Luci Jones: Basically, Ethereum converted its entire system to proof-of-stake.

Megan Hall: And what does that mean?

Albert Wu: Instead of thousands of people competing to solve energy-intensive puzzles, with proof-of-stake, everyone sets aside a number of coins. Then, people are randomly selected from that pool to process transactions.

Luci Jones: The ones who put in a bigger stake have a higher chance of getting selected, and getting cryptocurrency as a reward.

Megan: How is this process more energy efficient? 

Luci Jones: Well, Daniela says-

Daniela Barbosa: With proof of stake, your energy is on putting the stake down, but you don’t have to compete with everybody else. Once you put your stake in, it is now there. You're not doing computational energy to get to the next block.

Luci Jones: With the old way of getting cryptocurrency, it’s like you’re driving a race car in the Daytona 500. Everyone in the race uses a bunch of fuel, but only one person wins the prize money. 

Albert Wu: But for a proof of stake system, it’s like everyone puts their name in a hat and one winner is pre-selected. That means only the winning driver needs to fill up their tank and cruise to the finish line to take their medal.

Luci Jones: Both systems are a lot more complicated than that, but that’s the basic idea. 

Megan Hall: That makes sense. So did this change make a big difference in Ethereum’s carbon emissions?

Luci Jones: You bet! After switching to this new approach, emissions from Ethereum dropped by 99.99%. 

Albert Wu: It went from creating over 12 million tons of carbon dioxide per year to only one thousand.

Luci Jones: You’re going from country-sized emissions to that of a small, rural town. 

Megan Hall: Cool! 

Albert Wu: We’ll have to wait and see if other cryptocurrencies follow in Ethereum’s footsteps. But for now, it shows that small changes in technology can greatly benefit the environment.

Megan Hall: Great! Thanks, Albert and Luci!

That’s it for today. For more information, or to ask a question about the way your choices affect our planet, go to the public’s radio dot org slash possibly. Or subscribe to us wherever you get your podcasts. 

Possibly is a co-production of Brown University's Institute for Environment and Society, Brown’s Climate Solutions Initiative, and The Public’s Radio.