Digital assets that rely on blockchain technology, including certain cryptocurrencies and non-fungible tokens (NFTs), have seen a surge in popularity as speculative investments, but the technology has also been used for a number of commercial and non-commercial applications, including the decentralization of some financial transactions such as money transfers or for supply-chain tracking. As the dissemination and adoption of blockchain-backed digital assets surges, so too has its environmental and energy impacts. While early assessments of environmental and energy impacts were likely overblown, many popular blockchain technologies consume vast amounts of electricity today, producing millions of tons of carbon dioxide emissions and electronic waste. While the environmental and energy concerns for digital assets should be addressed, heavy-handed regulatory policies that attempt to restrict how operators use data centers are likely to be unsuccessful. Moreover, these broad restrictions could stymie legitimate innovative developments and uses for digital assets and blockchain-based applications.
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