What crypto mining says about the cognitive biases ruining our long-term decision making (and how not to fall into those traps)
Here’s a big problem with a possibly simple solution.
With all the hype around the extreme and rapid wealth that crypto has been creating, it can be easy to lose sight of the very real environmental cost of investing in the blockchain economy.
That sentence alone can be enough to turn people off from reading more, because it seems that we, as humans, often have a tendency to ignore those things over which we have no control.
Example: The sun will become a red giant in a few billion years and make our planet uninhabitable.
Unless you’re Elon Musk and aiming for Mars, for most of us that’s just a shrug statement.
So why is it so easy to ignore the massive electrical and power generation demand of running servers for the Bitcoin blockchain? It’s not a small problem. According to this article from the Columbia Climate School, the Bitcoin blockchain alone uses as much energy annually as the entirety of Argentina. Why does that not move more of us to focus on that problem?
Perhaps it has to do with our built-in cognitive biases.
Direct self-interest might be the most obvious way to both get attention and get people to care.
Imagine, for a moment, those advertisements that ask you to sponsor a disadvantaged child in a foreign country with a monthly stipend. Those ads have run for years and years, and they continue to run. When you see them, it’s hard not to feel some mix of emotions. You might feel sympathy for the children you see on-screen. You might feel some shame around not picking up the phone to become a sponsor. And you might even feel some anger toward the advertiser for so blatantly trying to pull at your heartstrings and manipulate you. All of those feelings might co-exist.
It’s no secret that we, as humans, have an attentional bias towards faces and human body parts. As social animals, we’re wired to notice social signals. And a statistic about, for instance, the magnitude of child hunger in Africa, is not going to capture our attention in the same way as a photo or video of a hungry child. For example, compare and contrast the emotional resonance of both the image and the quote below. Which one hits home the hardest?
“According to UNICEF, from 2000 to 2018 the number of malnourished children under the age of five in West and Central Africa grew from 22.4 million to 28.9 million” — Daniil Filipenco, developmentaid.org
That may be troubling, when we consider the implications of this bias. It makes us less receptive to facts which may, nonetheless, be important.
Why might that be? It can be interesting to think about what makes us act or not act in a given situation. Perhaps many of us are more unconsciously self-interested than we want to believe.
Imagine you’re in the checkout line at the grocery store. You look at the brightly colored magazines by the checkout. What kinds of headlines to you see?
They might look a little like this:
You can drop 10 pounds in 30 days!
5 ways to get your man excited about going to bed
3 low-calorie desserts you’ll LOVE!
8 signs your facial cleanser is ruining your skin
While it’s not a scientific experiment, advertisers do know how to capture our attention and sell magazines. They blatantly appeal to our self-interest. I’ve done the same when writing ads myself, because it works. Direct self-interest might be the most obvious way to both get attention and get people to care.
But what about when you give a gift to a friend or spouse? Or volunteer your time for an organization working toward a shared goal? Or sponsor a needy child in a foreign country?
For many of us, giving a gift engages a built-in reward system and makes us feel happier. For receivers, Dan Ariely tells us that getting a surprise or unexpected gift increases happiness and appreciation. It looks like a way of strengthening social bonds.
You might even look at altruistic behavior as still pertaining to our self-interest, because it makes us feel good and can increase happiness within our social circles.
So let’s revisit the issue of “mining” for the blockchain and energy use.
Current appeals are based on facts and statistics. We know roughly how much energy is being consumed for “proof of work” blockchains such as that used by Bitcoin. We know how much carbon is being released into the atmosphere. And, if we want to continue reinforcing a belief that Bitcoin and crypto represent the “future” of currency, we might even buy into the “greenwashing” that industry is fond of promoting when it comes to crypto mining.
As humans, our confirmation bias is robust. We will selectively believe facts that support what we already believe, and discount those contrary to our beliefs.
However, what if we saw the impact of crypto mining in a way that hit closer to home?
Hydraulic fracturing, or “fracking,” is the practice of injecting sand, water, and chemicals into the ground at high pressures to liberate oil and natural gas. That natural gas has been used to run Bitcoin “mining” operations.
The health risks to people who live in communities where fracking happens are real. For example, kids who are born within 2 km of an active fracking site are 2–3 times more likely to develop one of the most common forms of childhood cancer, acute lymphoblastic leukemia.
Imagine if we started seeing more personal stories, from individuals whose lives were impacted by living near fracking sites and legacy power plants being recommissioned for Bitcoin mining.
It’s one thing to read a number that feels far removed from our daily lives. It’s another altogether to connect with a suffering human whose only mistake was being born in the wrong zip code.
While personalizing the scope of the crypto energy use crisis may make it easier for us to connect with and care about it, there’s another cognitive bias that may be working against us. We have a tendency to prioritize immediate gains over future ones, a phenomenon known as hyperbolic discounting. In the case of crypto markets, which are currently “hot,” the prospect of potentially making life changing amounts of money right now might outweigh the rewards of acting for the greater good and earning a living the “slow” way.
To put it simply, it’s tempting to “play the market” out of a desire for short-term gain. We defer the longer term outcome of being environmentally friendly and allow ourselves to believe “greenwashing” by crypto mining companies because that supports a line of reasoning that aligns with our short-term goal.
I like to find the hope in a situation, and perhaps here we have an opportunity to look at our own biases. Becoming aware of them allows us to act in a way that transcends them. In the case of crypto mining, we can ask ourselves how certain environmental facts may impact us and the people we care about. It seems that simply doing that can help us think in more empathetic ways and change our decision making.
There’s also the possibility that we can counter “greenwashing” narratives from companies by gathering and publishing more individual, real-world accounts from people impacted by environmental issues. Going back to a personal, human level can help us remember what really matters. And maybe that’s the lesson we’ll learn more deeply as we address the environmental impacts of crypto mining.
