Editor’s note: Jake Cline is a Miami-based writer and editor whose work has appeared in The Washington Post, The Atlantic, and other national publications. He was part of the team that won the 2019 Pulitzer Prize for Public Service for the South Florida Sun Sentinel’s coverage of the mass shooting at Marjory Stoneman Douglas High School. The opinions expressed here are his own. Read more reviews at CNN.
Thanks in large part to bitcoin evangelism by high-ranking officials in Miami, the city has spent the past few years in full-on cryptomania.
In the vision of Mayor Francis Suarez, the city’s chief digital currency cheerleader, Miami will one day become the national capital of cryptocurrency.
Two years ago, Miami published a Bitcoin White Paper — a blueprint for its transformation into a 21st-century city. Around the same time, famous crypto personalities started moving to town and Miami began selling its own digital currency, MiamiCoin.
As the fever picked up, cryptocurrency exchanges started advertising on Miami billboards. Bitcoin ATMs have been installed at neighborhood gas stations and convenience stores.
And perhaps the most visible sign of Miami expanding its cryptocurrency rights was the March 2021 announcement by Miami-Dade County that it had sold the naming rights for its major sports arena, the home of the beloved Miami Heat NBA franchise, to FTX. a now-defunct cryptocurrency exchange founded by disgraced crypto-entrepreneur Sam Bankman-Fried.
That partnership, not even two years old, came to an unfortunate end last week. On Wednesday, the beleaguered company and Miami’s local government finalized a deal to cancel the contract and remove the now-tarnished FTX logo from the sports field.
Over the past few months, as the extent of Bankman-Fried’s alleged fraud has become clear, some city aldermen and businessmen have scrambled to remove what many of us suspected from the start as just a terrible business deal. Bankman-Fried, who has maintained her innocence, pleaded not guilty to federal fraud charges at a New York court hearing earlier this month.
Now we know what a fiasco Miami’s love affair with crypto was. The financial cost of last year’s cryptocurrency crash was too great for thousands of investors who invested and then lost funds they could have abandoned.
But my own observations were not based on certain knowledge that cryptocurrency would collapse, although its collapse was faster and more spectacular than even most skeptics expected.
My opposition to cryptocurrency is based on its harmful effects on the environment. It always seemed particularly insane to me that Miami, billed as “the world’s most sensitive major coastal city,” was turned into a currency created by climate-disrupting technology.
Many people don’t realize that a currency that exists mostly in the digital space can have a devastating effect on our environment in real life. Bitcoin mining uses a large amount of resources. As Elizabeth Kolbert of the New Yorker wrote in an April 2021 article, “worldwide bitcoin-mining operations now use about the annual electricity consumption of the entire nation of Sweden….”
Citing data scientist Alex de Vries’ website Digiconomist, Colbert stated that “one bitcoin transaction uses the amount of energy the average American household consumes in a month.” Similar reports can be found in The New York Times, The Washington Post, and CNN.
As the popularity of cryptocurrency has increased, Bitcoin mining equipment has accelerated. According to a study in the research journal Nature Sustainability, between January 1, 2016 and June 30, 2018, mining operations for four major cryptocurrencies released an estimated 3-15 million metric tons of carbon dioxide.
Even China, the world’s biggest polluter, banned bitcoin mining in 2021 citing high carbon emissions. We are now in a period called “crypto winter” after the world’s enthusiasm for cryptocurrencies has waned. Despite this, the carbon footprint of bitcoin, still the world’s most valuable digital currency, continues to be large.
Last September, a report by the White House Office of Science and Technology Policy found that cryptocurrency production in the United States emits as much greenhouse gas as the nation’s railroads, and warned that “depending on the energy intensity of the technology used, crypto-assets may not meet U.S. climate commitments and goals.” may hinder broader efforts to achieve net zero carbon pollution.”
But despite all this information, Suarez is convinced that it is possible to produce bitcoin in an environmentally friendly way.
“I would like to sort of, I think, dispel the myths – I call them myths – – sort of. [crypto] mining as an environmentally unfriendly activity,” the mayor said during the June 2021 live Crypto Conference.
Because South Florida has renewable energy sources, he argued, cryptocurrencies could finally be encouraged to stop contributing to the destruction of our planet. He argued that, in fact, because renewable energy sources are available, miners may choose to use them in the future. This is an extraordinarily weak argument. It would be great if we could get Bitcoin miners to move away from cheap and dirty energy sources.
But he’s not wrong – as bitcoin’s main competitor, ethereum, proved last year, it’s entirely possible to mine bitcoin responsibly. Ethereum, the decentralized global network used to verify billions of dollars worth of cryptocurrency transactions, completed a system-wide transformation known as Merge in September.
In fact, ethereum has switched from the process preferred by bitcoiners to a mining process known as proof-of-stake, which requires significantly less computing power than proof-of-work. With this, ethereum appears to have reduced its worldwide energy consumption by more than 99%.
While some bitcoin miners say they want their industry to go green, most are resisting calls to adopt a proof-of-stake system, fearing it will hurt their profits. Meanwhile, Miami residents seem divided on environmental issues. According to a survey conducted by Yale University as well as George Mason University, they believe local officials and state officials, including the governor, “need to do more about global warming.”
But Miami voters helped fuel a “red tide” of Republican dominance in both houses of the Florida legislature — the GOP-controlled body that allows fossil fuel companies to write bills.
Last November, Miami-Dade County residents also voted to re-elect Gov. Ron DeSantis, who, while not calling himself a “climate change denier,” said he hoped he would never be mistaken for a “climate change believer.”
Despite everything going on with the digital currency’s sharp decline, Suarez, who is also the president of the US Conference of Mayors, believes in bitcoin.
Miami-Dade County will next host Bitcoin 2023, the next installment of the annual conference, later this year. Suarez told a Miami TV station that he has continued to receive his government salary in bitcoin since November 2021.
Some dreams, it seems, die hard.