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From YouTube: Assessing Crypto Asset Sustainability
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A
So
when
we
talk
about
crypto
asset
sustainability,
a
key
question
that
we
need
to
ask
is:
how
do
we
measure
that?
And
secondly,
what
are
we
even
measuring,
because
sustainability
by
itself
is
a
really
broad
term,
and
it
can
talk
about
a
lot
of
different
things
when
we
talk
about
crypto
asset
sustainability,
one
of
the
first
things
we
typically
look
at,
and
one
thing
that
we
see
a
lot
of
headlines
about
is
the
energy
consumption
of
the
bitcoin
network.
A
But
I
do
want
to
point
out
that
if
you
look
at
these
two
different
approaches,
if
you
take
the
total
numbers
over
last
year
per
my
own
energy
index,
bitcoin
was
consuming
100
134
hours
of
electrical
energy
and
per
cambridge.
That
number
was
140
or
what
hours
of
electrical
energy.
So
I
think,
ultimately,
the
difference
between
the
two
methods.
Isn't
that
interesting,
I
think
the
key
thing
is
is
if
we're
looking
at
the
energy
consumption
of
the
bitcoin
network.
Nowadays
we
got
a
pretty
good
idea
about
those
numbers
and
we
can
use
those.
A
There
are
more
assets
like
bitcoin
out
there,
the
biggest
one,
the
second
biggest
one,
that's
using
proof-of-work
mining
like
bitcoin,
is
ethereum
at
the
moment.
Still
they
haven't
completed
their
switch
to
proof
of
stake.
Yet
and
after
that
you
have
crypto
assets
like
dogecoin
litecoin,
they
significantly
consume
less
energy,
but
at
the
same
time
it
also
scales
along
with
their
market
capitalization,
because,
ultimately,
what
we
see
in
a
lot
of
these
assets
is
that
their
energy
use
is
just
related
to
how
much
the
miners
are
earning.
A
This
is
a
bit
of
an
exclusive
image,
so
I
did
the
calculation
based
on
my
own
energy
index
approach
and
the
cambridge
approach
for
the
top
10
largest
crypto
assets
that
are
making
use
of
crypt
proof
of
work.
Mining
note
that
the
site
is
a
logarithmic
scale,
so
otherwise
the
smallest
one
wouldn't
even
be
visible,
but
with
this
image
I
wanted
to
show
that,
if
you're
applying
this
approach,
the
ultimate
result
is
that
you
can
conclude
it
doesn't
really
matter
which
proof
of
work
assets.
A
But
then
what
we
got
an
energy
consumption
estimate
we
can
do
it
pretty
easily,
but
in
order
to
give
that
some
meaning
we
need
to
know
where
is
that
energy
being
sourced
from
what
is
ultimately
the
carbon
emissions
related
to
the
energy?
That's
being
used?
That's
a
tough
question,
because
mining
is
somewhere,
you
can
do
anywhere
in
the
world
and
we
don't
know
which
miners
are
located.
Where
now
the
good
news
is.
A
A
A
They
were
moving
from
the
north
of
china
in
the
wintertime,
the
dry
season
to
the
south,
during
the
summertime
and
during
the
rainy
season,
so
they
could
take
advantage
of
cheap
hydropower
and
then
migrate
back
to
the
north
and
use
coal
during
the
winter
months,
and
it's
nice
to
see
that
and
that
migrational
pattern
just
shows
up.
When
you
look
at
the
data
over
time,
we
can
see
the
summer
periods
with
a
lot
of
hydropower.
A
We
can
see
the
winter
months
with
a
lot
of
coal
based
power,
but
then
last
year-
and
I
addressed
this
earlier
today-
china
said
we
had
enough.
We
had
they
found
that
these
miners
were
responsible
for
the
revival
of
some
idle
coal
mines,
and
they
just
didn't
want
this
crypto
mining
industry
anymore,
and
they
they
wanted
to
comply
with
their
climate
targets
and
they
just
kicked
out
this
industry.
A
The
primary
energy
choices
is
natural
gas.
So
what
we
see
is
that
the
average
electricity
mix
is
also
changing.
The
majority
of
the
network
was
already
powered
by
fossil
fuels
and
that
majority
increased
mainly
due
to
hydropower
being
traded
in
for
natural
gas,
and
another
issue
is
that,
even
though
we
see
the
share
of
coal
going
down,
you
would
think.
A
Okay,
that's
great,
but
unfortunately
the
kazakhstan
coal
is
probably
one
of
the
worst
sources
of
coal
in
the
entire
world,
because
in
kazakhstan
they
primarily
rely
on
hardcore,
which
is
the
worst
type
of
core
you
can
be
using
and
they
have
a
really
inefficient
way
of
processing
it.
So,
ultimately,
the
carbon
emissions
of
that
can
be
50
percent
higher
than
what
would
be
normal
in
the
us
or
in
china
altogether.
A
This
was
a
couple
of
months
ago,
by
the
way,
so
in
the
meanwhile,
the
energy
use
of
the
network
has
been
going
up,
but
this
data
is
based
on
august
last
year
and
back
then
this
is
the
quantified
footprint.
What
does
that
mean?
Well
65
megatons
of
carbon
dioxide,
it's
more
than
what
a
country
like
greece
is
responsible
for
every
year.
It's
also
more
than
what
we're
saving
from
deploying
electric
vehicles
around
the
world.
So
we're
talking
a
pretty
substantial
number
here.
A
It's
around
0.2
percent
of
our
global
carbon
emissions
and,
of
course
you
can
say,
okay.
Well,
there
are
bigger
tins,
but
it's
definitely
not
a
insignificant
amount
and
the
interesting
thing
about
this
map
is,
it
also
shows
where
those
emissions
are
being
sourced
from
so
we
see,
like
I
just
said,
kazakhstan
and
the
us
are
really
driving
this
number
and
also
within
the
u.s.
A
One
of
the
reasons
why
bitcoin
mining
is
so
popular
in
these
states.
I
think
it's
good
to
point
out
that
kentucky
last
year
introduced
tax
breaks
to
lure
these
miners
to
their
grid,
and
they
literally
said
you
know.
We
have
an
obsolete
coal
industry
and
we
kind
of
like
to
have
a
buyer,
for
that,
and
georgia
is
actually
moving
in
a
similar
direction.
They
are
also
recently
talking
about
introducing
tax
breaks
for
minus
and
taxes
has
been
very
welcoming
to
these
bitcoin
miners
as
well.
A
Well,
like
I
said
at
the
beginning,
when
we
talk
about
sustainability,
we
also
need
to
talk
about
those
kind
of
things,
so
we
can't
just
talk
about
the
energy
use
and
carbon
emissions.
We
also
need
to
talk
about
things
like
hey.
The
system
is
using
highly
specialized
equipment
if
you're
mining
bitcoin.
You
can't
just
do
that
with
any
laptop.
A
You
need
a
very
professional
mining
device
and
you're
going
to
need
a
lot
of
chips
to
create
that
machine
in
the
first
place,
so
we're
already
dealing
with
a
global
chip
shortage,
so
we're
going
to
be
using
some
capacity
that
we
could
also
use
to
do
other
things.
I
can't
quantify
the
impact
of
it
just
want
to
point
out
that
we're
in
a
global
chip
shortage.
A
So
if
we're
putting
chips
into
highly
specialized
machines,
that
can't
do
anything
else,
but
mining
we
lose
capacity
for
other
things,
and
the
other
thing
is
that
these
machines
tend
to
become
obviously
pretty
quickly.
The
only
thing
they
can
do
is
mining
and
they
are
in
use
for
as
long
as
they
are
profitable
at
that
task.
So,
while
they're
making
money,
that's
great
they're
running,
but
typically
in
a
period
of
one
and
a
half
years,
they
get
to
their
break-even
point.
A
And
then
the
question
is
okay.
What
are
you
going
to
do
with
your
device?
Are
you
going
to
store?
It
hope
that
the
bitcoin
price
go
up
or
the
only
alternative
is
throwing
it
away,
because
you
can't
repurpose
the
device
and
you're
using
highly
specialized
chips,
so
also
the
e-waste
output
of
this
network
can
ultimately
be
as
high
as
well.
My
home
country,
the
netherlands,
at
least
in
terms
of
small
it
equipment,
which
is
an
additional
issue
on
top
of
the
energy
use,
and
it
just
comes
on
top
of
it.
A
The
energy
use
is
not
just
emissions.
It
also
means
that
in
a
lot
of
cases,
these
miners
can
overload
a
local
grid,
and
we
have
seen
that
in
so
many
cases.
By
now
that
all
these
miners
are
looking
for
cheap,
cheap
energy,
cheap
electricity,
they
all
want
to
get
the
same
cheap
sources
because
they
all
have
the
same
biggest
expense,
but
it's
driving
them
to
the
same
locations
and
it's
overloading
those
grids.
A
So
that's
why
we
see
on
the
right
side,
numerous
examples
of
grids
that
have
been
facing
in
the
worst
case,
power
outages
as
a
result
of
all
these
bitcoin
miners
coming
to
that
grid,
and
it's
a
big
issue,
because
ultimately,
if
people
are
left
in
the
dark,
you
know
you're
not
left
in
the
dark
when
everything's
fine,
how
you're
left
in
the
dark.
When
there
is
a
peak
in
the
mount
which
happens
if
either
it's
40
to
50
degrees
outside
or
minus
20.
A
A
Now
the
good
news
is,
I've
been
talking
a
lot
about
bitcoin
and
its
proof
of
work
algorithm,
but
there
are
other
solutions
to
running
a
crypto
asset
nowadays,
so
bitcoin
isn't
entirely
representative
for
what's
really
going
on
in
the
space.
In
fact,
I
would
expect
that
most
project
nowadays,
and
especially
the
news
ones
that
are
being
launched.
A
They
don't
use
proof
of
work
to
look
to
bootstrap
anymore.
They
will
typically
run
on
proof
of
stake,
or
something
else,
and
the
nice
thing
about
proof
of
stake
compared
to
proof
of
work,
is
that,
whereas
in
proof
of
work,
you
have
this
really
massive
lottery
going
on
with
all
these
devices,
just
constantly
running,
trying
to
guess
a
winning
number
and
hoping
to
guess
one
right,
so
they
can
get
to
create
the
next
block
for
the
blockchain
and
get
a
reward
for
that
in
proof
of
stake.
You
don't
need
that.
The
only
thing
is
you.
A
A
What
you
need
is
coins
and
a
device
with
an
internet
connection.
You
don't
need
to
have
your
machines
running
24,
7
and
the
amount
of
machinery
you
have
running
will
not
change
your
odds
of
winning,
so
the
nice
thing
about
that
is
that
it
takes
away
the
hardware-based
competition
and
it
can
tremendously
reduce
the
amount
of
energy
we
require
to
run
this
type
of
systems.
A
I
wrote
at
the
top
here
that
if
ethereum
succeeds
in
changing
its
algorithm
from
proof
of
work
to
proof
of
stake,
which
is
what
they're
working
on
they
could
save
up
to
99.99
of
their
energy
consumption,
which
is
a
pretty
massive
amount.
It's
just
one,
ten,
thousands
of
what
they're
currently
requiring,
but
it's
a
very
difficult
thing
to
estimate.
Still,
ultimately,
we
don't
know
how
ethereum
will
really
look
like
once
it
switches
to
proof
of
stake,
how
how
many
nodes
will
be
active
in
the
network?
What
will
be
the
hardware
requirements?
A
How
will
that
develop
over
time,
because,
as
the
network
grows,
the
hardware
requirements
might
also
grow
and
the
energy
consumption
might
grow
unless
ethereum
also
manages
to
implement
charting
it's
a
very
fun
discussion
you
can
have
on
that,
but
there's
just
a
lot
of
unknowns
to
such
a
prediction
and,
moreover,
we
still
see
a
lot
of
differences
even
within
the
crypto
assets
that
are
based
on
proof
of
stake.
So
at
the
bottom
here
I
got
a
report
from
the
cryptocarbon
ratings
institute
that
was
published
several
weeks
ago
and
they
looked
into
okay.
A
A
And
what
you
see
is
that
if
you
look
at
this
metric,
the
electricity
used
per
transaction,
you
can
see
that
some
systems
are
a
lot
more
efficient
than
others.
It
ranges
from
50
watt
hours
per
transaction
to
less
than
one
watt
hour
per
transaction.
Now,
just
to
give
this
a
little
bit
of
a
meaning,
if
we
would
look
at
the
energy
use
of
a
payment
provider
like
visa,
the
energy
consumption
per
transaction
would
be
around
one
and
a
half
watt
hour.
A
So
some
of
these
are
doing
really
well.
But
if
you
look
at
cardano
they're
doing
almost
30
times
that,
so
you
could
be
wondering
hey
if
we're
switching
from
our
current
system
to
cardano.
In
this
case,
we
would
be
increasing
our
total
energy
use
by
30
times,
which
would
still
be
pretty
bad
if
you
think
about
it,
because
ultimately,
it's
a
significant
factor.
It's
just
that
with
proof
of
work
being
around
it,
try
it
tends
to
take
away
the
focus
from
that,
because
it
adds
such
a
large
amount.
A
On
top
of
that
that
we
forget
that
proof
of
stake
by
itself
isn't
always
perfect
either,
and
I
think
this
was
one
of
the
points
that
was
raised
during
an
earlier
talk.
If
we
move
to
proof
of
stake,
we're
not
necessarily
there.
This
is
the
last
bit
and
it's
difficult
to
solve,
because
ultimately,
this
is
blockchain.
A
Blockchain
relies
by
design
on
the
replication
of
data
replication
of
processes
if
we're
doing
things
in
a
single
server.
If
we're
moving
that
stuff
to
a
blockchain,
what
happens
is
we're
going
to
need
multiple
servers
and
I
don't
know
how
many
there
are
ultimately
going
to
be,
but
it's
going
to
be
more
than
if
we
just
take
that
single
server
and
there
can
be
a
benefit
from
not
having
to
rely
on
that
single
server,
because
that's
also
blockchain.
A
It
takes
away
the
centralized
single
point
of
failure,
but
at
the
same
time
adding
that
trust
through
distributing
data
comes
at
the
price,
which
is
typically
a
reduction
in
efficiency.
So
we
always
have
to
think
about.
Does
our
use
case
really
warn
that
we
put
stuff
on
a
blockchain
or
should
we
be?
You
know?
Are
we
fine
with
our
current
system?
Do
we
trust
the
people
that
we
have,
because
trust
actually
tends
to
be
more
efficient
than
whatever
we
can
do
on
the
blockchain?
A
A
I
have
one
one
minute
left
like.
I
would
assume
that
falcon
is
probably
somewhere
between
this
type
of
proof
of
stake
networks
and,
ultimately
proof
of
work
networks,
because
there
there
is
an
incentive
to
you
know,
employ
solid
state
drives,
but
the
energy
consumption
of
that
is
going
to
be
less
so.
The
ratio
hardware
to
energy
is
going
to
be
very
different
from
what
we
see
in
bitcoin,
probably
low,
on
energy
and
relatively
high
on
the
hardware.
A
A
A
What
we
typically
do
is
we
take
the
total
energy
consumption
of
the
system,
and
then
we
we
divided
by
the
number
of
transaction,
that's
being
executed
in
total,
so
yeah
everything
added
up
together
for
bitcoin.
These
numbers
are
a
lot
higher
ahead
and
we're
not
talking
about
watt
hours,
but
we're
talking
about
kilowatt
hours.
Oh
a
single
bitcoin
transaction.
A
Well,
if
you
look
at
my
data
today,
it
will
say
it's
equivalent
to
2200
kilowatt
hours
of
electrical
energy
consumption
and
per
bitcoin
transaction.
Also,
a
carbon
footprint
of
more
than
1
000
kilograms
might
be
hard
to
wrap
your
head
around
that,
but
that's
more
than
a
per
passenger
carbon
footprint
of
a
flight
from
austin
to
amsterdam.
A
This
is
just
based
on
averages,
so
indeed
we
take
the
location
and
we
just
apply
the
average
emission
factor
of
a
grid.
You
could
actually
argue
that
if
you're
going
to
look
into
this
one
thing
you
should
be
doing,
is
you
look?
You
should
look
in
the
marginal
impact
because,
ultimately,
when
you
increase
the
demand
on
a
grid,
what's
going
to
happen,
is
some
type
of
fossil
fuel
source
is
going
to
come
online
to
power
that
and
the
marginal
resources?
A
In
most
cases,
especially
in
the
us,
is
coal,
so
any
increase
in
demand
is
typically
going
to
be
sourced
from
coal.
Unfortunately,
we
can't
really
specify
that
properly.
So
that's
why
we
had
to
go
with
averages,
but
even
on
averages.
Bitcoin
got
less
green
over
the
last
year.
So
if
we
would
look
at
the
marginal
impact,
the
numbers
would
probably
be
even
worse.
A
C
A
It
depends
I
mean
if,
in
germany,
the
the
the
marginal
resource
is
still
called,
so
it
really
depends
on
where
you're
located
in
europe,
I
think
in
in
most
cases
the
marginal
resources
fossil
fuels,
the
marginal
emission
factor
is
going
to
be
higher
than
the
average.
There
are
exceptions,
of
course
you
would
have
to
check.
That's
that's
that's
difficult.