Crypto And The Climate
Bitcoin is the most popular cryptocurrency today. Over the years, bitcoin investors have earned huge profits with the tremendous surge in its price. Because of this, it seems like a very tempting option of investment for many people. But come to think of it, the enormous energy consumption of this crypto has immense implications for the environment. So, in this blog, we’ll see how cryptocurrency affects the climate.
Environmental Impacts of Bitcoin
- Energy Consumption
Generating a target hash for a block of bitcoin is a trial-and-error method. Just like someone trying to crack your password by thinking of plausible ones and trying until they find the actual one. There are more than hundreds of thousands of computers trying to crack it, which could add up to trillions of tries. With so many computers involved, the energy consumption is tremendous.
To compete with other miners, the miners are required to continuously increase their computing power, which makes it even worse. On the other hand, as the rewards are continuously being cut in half, miners need to reduce their power consumption or process more transactions to generate profit from mining.
- e-waste
To make the best out of mining, miners need efficient hardware to work with that can produce the most computations per unit of energy. Now, such specialized hardware becomes obsolete every 1.5 years and cannot even be used for other purposes after reprogramming. So, this adds an enormous bulk to the already increasing e-waste on our planet.
Making Cryptocurrency Sustainable
As there is no central authority involved in cryptocurrencies, with millions of dollars invested in them, shifting them to an energy-efficient system is difficult. But different projects are running to reduce the carbon footprint of cryptocurrency. The Bitcoin Mining Council promotes energy transparency and making mining sustainable.
There’s another initiative, Crypto Climate Accord, which aims to run all blockchains completely on renewable energy by 2025 and reach zero emissions for the entire crypto industry by 2040. It encourages the use of energy-efficient validation methods and that proof of work systems be set up in an area where renewable energy is available abundantly.
Building a future for cryptocurrencies comes with this important task of being mindful of their implications on the environment and working on ways to make them greener.
Final Thoughts
Cryptocurrencies wanting to gain more popularity need to also take up responsibility for their impact on the climate. Green cryptocurrencies will lead the crypto market of tomorrow.
At Kointrack, we provide information on the latest trends in the crypto market. And also work towards making blockchain technology accessible to people.
