1/FWIW I think this debate about the climate impact of #cryptoart risks degenerating into attention seeking and virtue signalling if not careful. PoW energy use is definitely a big problem, but it's not constrained to NFT by any means. It's an issue for ALL txes secured by PoW

2/imo #cryptoartists have a big role to play in reducing the environmental impact of PoW. But I'd love to see a deeper understanding of the issue before we start villainising PoW use or we cut off possibilities that we incorrectly price as too environmentally expensive

3/PoW today is (probably) carbon expensive because a) securing PoW chains like ETH or BTC requires enormous amount of compute power, but more importantly b) that compute power...today... is primarily powered upstream by fossil fuels

4/PoW mining today is a professional infrastructure game, and with BTC at 45k+ and ETH at c$2k and climbing, it will continue to attract bigger and more competitive institutional infrastructure players

5/In the mining game, the most efficient producers win. It might be intuitive to think that the people with access to the latest chip technology are the most efficient producers, but that is actually not the case

6/The most efficient producers are those with access to zero marginal cost of energy. When you pay zero dollars per kwh, you can afford to use cheap crap inefficient mining equipment that no one else wants (rather than scarce efficient expensive mining equipment)

7/At zero marginal cost per kwh, you buy old mining equipment at bargain basement prices, rack it and stack it, and you then can produce way more compute power than people paying 3c or 5c or 6c / kwh, even if they're using the latest equipment. You win every time basically

8/But how on Earth can you get zero cost per kwh power? Well, one of the sucky things about energy is that it's hard to store. Which means that when there isn't enough demand for energy (which often happens several times a day) . . .

9/...wind farms, dams, geothermals etc go into oversupply, which means they effectively need to shutdown or "curtail" production. Which is expensive and can even threaten the viability of financially marginal renewable energy projects

10/Well, what if you had a back up source of demand that is willing to pay you a substantial (but fixed) fee for the right to soak up ALL the energy you can produce when no one else will take it?

11/I'm talking about co-located BTC / ETH mining farms that rack and stack old equipment and can absolutely CRUSH even the most efficient mining competitors because they are paying 0c per kwh (cf other "competitive" miners who can secure "cheap" 3-5c per kwh power)

12/With renewable co-located mining farms, miners win, BTC/ETH users win, and the environment wins because renewable energy projects that were financially marginal suddenly become profitable and sustainable

13/This isn't a pipe dream, this is happening RIGHT NOW. Professional institutional infrastructure companies are in a land grab right now for the best renewable collocation sites. I have friends who have founded exactly these kinds of funds and are absolutely killing it

14/Back in 2019 I also had a long talk with an old friend who runs one of the biggest energy infrastructure funds on the planet. Even with BTC at ~c.$5k, they were already running models and identifying sites

15/At $5k their main problem was that they'd take too much mining market share too quickly. At $45k I suspect the problem is getting smaller. At $100k+ I expect everyone and their dogs will be rushing into co-located mining sites

16/Given the economics, I am willing to bet that BTC PoW mining will be more than 50% renewable by 2026. And effectively 100% by 2030. Not because miners are altruistic or eco-conscious. But just because anyone relying on paying a coal plant even 1c/kwh will go out of business

17/The main constraint today for 100% renewable mining is just time and, to a decreasing extent every day, BTC market cap size

18/That's not to make light of the emissions produced today, they are serious. But shaming people for their use of PoW chains doesn't make sense to me. If anything we want to accelerate price growth in PoW chains so we accelerate the migration to renewable co-located mines

19/Encouraging people in Defi, BTC, NFT etc to estimate their current carbon usage and then to buy offsetting carbon credits, on the other hand, does make a ton of sense to me (h/t Josh Davis, first time I had heard of that idea)

20/In the longer term, I think it's even likely entire cities will be built around previously uneconomical renewable energy sources, but I think that's at least 20 years away (some good sci fi themes in there maybe!)

21/There's also a tangential point about PoW vs PoS which I won't explain in detail but, suffice to say, the main attraction of PoS has more to do with transaction throughput than with environmental impact (transaction throughput is a tough problem even if all PoW is green)

22/Hope the context I'm offering helps #cryptoart in some way as it explores the environmental impact of #crypto, and be sure to catch this Clubhouse meet on eco impact of NFTs! https://twitter.com/sutu_eats_flies/status/1358817067374313475?s=20