TL;DR

Blockchains themselves are not bad for the environment, but rather the energy sources used to power specific types of blockchains can be considered bad for the environment, and some blockchains require a lot of energy to operate. The core issue is that cheaper energy sources such as Oil and Coal are preferentially selected to power a blockchain mining operation in order to maximize profit. As renewable energy sources become cheaper and more available to miners, the environmental impact of blockchains will continue to decrease. Some large soverign nations have recently regressed on commitments to renewable energy sources, which has resulted in some increases to the environmental impact of blockchains due to more of the energy consumption coming from dirty energy sources, however blockchains still continue to lead the world in renewable energy use.

ELI5

Blockchains require a lot of batteries to turn on. If we keep buying batteries from the store and throw them out once they are dead, we end up buying a lot of batteries every year to keep the blockchains running. If we instead buy rechargeable batteries, we can use the same batteries over and over again, and we don't need to buy as many batteries every year. The non-rechargeable batteries are like dirty energy sources and result in evironmental damage, while the rechargeable batteries are like renewable energy sources and result in less environmental damage. The more renewable energy sources we use, the less environmental damage we cause.

As a beginner

When compared against other conventional industries known for their levels of pollution, blockchains are in the list, but typically found near the bottom of that list. This is not to say that blockchains should not aim to improve their environmental impact, but rather that the impact is not as bad as it is often portrayed in media segments. When applying a strategic lens to environmental improvement across industries, it is important to fous on the industries that have the largest impact first rather than the industries that are the easiest to target. This is why the focus on blockchains is often misplaced, as the impact of blockchains is relatively small when compared to other industries.

Proof of Work vs Proof of Stake

There are 2 primary methods of securing a blockchain called consensus mechanisms, Proof of Work (PoW) and Proof of Stake (PoS). PoW is the original method of securing a blockchain, and is the method used by Bitcoin. PoS is a newer method of securing a blockchain, and is the method used by Ethereum. There are other consensus mechanisms, but we'll focus on these 2 as they are the most popular. PoW is considered to be more secure than PoS, but PoS is considered to be more energy efficient than PoW (by a very large margin). This is why Bitcoin is considered to be more secure than Ethereum, but Ethereum is considered to be more energy efficient than Bitcoin.

Proof of Work

PoW is a method of securing a blockchain by requiring a miner to solve a cryptographic puzzle in order to add a block to the blockchain. The puzzle is designed to be difficult to solve, but easy to verify. This means that a miner must spend a lot of energy to solve the puzzle, but once the puzzle is solved it is easy for other miners to verify that the puzzle was solved correctly. This is why PoW is considered to be more secure than PoS, as it is very difficult to solve the puzzle, and the energy required to solve the puzzle is very high. The difficulty of solving the puzzle is adjusted over time based on the number of miners attempting to solve the puzzle, so as more miners join the network the difficulty of the puzzle increases (and similarly decreases if miners stop trying to solve the puzzle). It is this high energy requirement that is the securitization of the network and the data within it, no individual could reasonably spend enough energy to solve puzzles fast enough to outpace the entire network of miners. With Bitcoin, the puzzle is alogrithmically designed to take approximately 10 minutes to solve, and the difficulty of the puzzle is adjusted every 2 weeks (increased difficulty if solving the puzzles took less than 10 minutes, and decreased difficulty if solving the puzzles took more than 10 minutes).

Proof of Stake

PoS is a method of securing a blockchain by requiring a miner to stake a certain amount of tokens in order to add a block to the blockchain. The tokens are locked into the network, and if the miner attempts to add an invalid block to the blockchain some (or all) of the tokens are penalized and become no longer available to the miner (possibly destroyed). This means that a miner is incentivized to only add valid blocks to the blockchain, as adding an invalid block would result in a loss of tokens. PoS still requires solving a puzzle, but this puzzle is significantly simpler than the PoW puzzle, and is only used for adding a very small level of algorithmic securitization to the block. This means that the energy required to power a PoS blockchain is significantly smaller as the blockchain does not require a large amount of energy to secure transactions, they are instead using their own tokens and the threat of losing those tokens to secure the network. This is why PoS is considered to be less secure than PoW, because the threat of losing tokens is not as strong as the requirement of spending a lot of energy.