Digital money has gained prominence over the years as world markets increasingly gravitate towards a cashless economy. In the midst of this, cryptocurrency has emerged as a popular choice as it offers users a cheaper and quicker avenue to transfer money without the aid of any intermediaries such as central banks. However, cryptocurrency poses a major threat to the environmental wellbeing of the planet as crypto mining consumes copious amounts of energy and generates thousands of tons of electronic waste in turn. Bitcoin, in particular, is notorious for its energy consumption, taking up 707 kWh per transaction.
Crypto mining and energy consumption
Much like gold, crypto mining takes up a considerable amount of energy.
Cryptocurrencies like Bitcoin and Ether function on the proof of work (PoW) system. This system requires users to solve complex mathematical computations to facilitate the generation, or mining, of coins. It is this feature that makes crypto mining decentralized and convenient for many, while also offsetting possible instances of cyber-attacks.
However, crypto mining is not feasible given that it requires costly machinery and an abundance of electricity to energize the hardware systems that oversee the full spectrum of its operations. According to a research analysis conducted by the University of Cambridge, Bitcoin mining expends energy of 121.36 terawatt-hours every year.
Given its large amount of energy consumption, the People’s Republic of China has effected a ban on the mining, trading, and services of Bitcoin (BTC) in the country. In doing so, the government plans to take an active stance in combating climate change by reducing the negative environmental impact of cryptocurrency mining.
The green costs of crypto mining
Cryptocurrencies of late have become quite notorious for the extent of their energy usage. This comes as countries actively shift towards adopting greener, more sustainable practices in the face of climate change.
As far as what the green costs of crypto mining entail, Digiconomist reported that Bitcoin emits an estimated 96 million tons of carbon dioxide on yearly basis. On the other hand, Ethereum gives off over 47 million tons of carbon dioxide every year. Additionally, crypto mining also contributes to the accumulation of a considerable amount of electronic waste in the form of outdated computer appliances.
However, efforts are being made to make cryptocurrency green through the implementation of more sustainable alternatives to the current crypto mining practices. The Crypto Climate Accord aims to make crypto blockchains completely reliant on renewable sources of energy by 2025, with the additional goal of achieving the zero-emissions mark by 2040. Additionally, Ethereum has pledged to reduce its energy consumption by 99.25% by 2022.
Experts have also suggested shifting Bitcoin functions closer to oilfields where they can utilize waste methane to mine Bitcoin.