Cryptocurrency has brought new ways to use digital money and decentralization. But as more people and businesses use it, there’s worry about how it harms the environment.
Cryptocurrency is in the form of a digital currency aiming at cutting out middlemen and giving control to users. It requires, however, a lot of energy, equipment, internet, and global infrastructure to work. As such, it has a huge environmental impact, using as much energy as small countries in some networks, not to mention problems related to its water and waste usage. Read more to know just how this digital money affects the environment.
Key Takeaways:
- Bitcoin and other proof-of-work cryptos are energy-intensive, more so than in some small countries.
- The U.S. is the biggest Bitcoin miner, handling over one-third of global mining.
- Bitcoin mining creates thousands of tons of e-waste annually
- Traditional financial systems, like credit cards, use about the same energy as a non-proof-of-work blockchain.
Introduction: The Environmental Impact of Cryptocurrency
People often talk about how fast, private, and free crypto is, but they are not talking about how bad cryptocurrency is for the environment. This overview, “The Dark Side of Crypto: Environmental Impact Explained,” shows how mining and using cryptocurrency makes climate change worse and wastes resources.
More and more people invest in and mine cryptocurrencies and the environmental impact is coming into view. What does this “dark side” mean, and why is it so important to understand the environmental cost of cryptocurrency?
Energy Consumption of Cryptocurrency Mining
What is Cryptocurrency Mining?
New coins and confirmed transactions are products of crypto mining. Miners require powerful computers that are used to solve puzzles that get them a reward in the form of cryptocurrency. In this process, the blockchain is made secure but at a huge rate of electricity.
Why Does Cryptocurrency Mining Use So Much Energy?
Mining requires powerful computers that run constantly to solve puzzles and validate transactions. This means the usage of a lot of electricity.
For example, Bitcoin is one of the most energy-consuming cryptocurrencies that consumes more energy than some entire countries.
How Much Energy Does Cryptocurrency Mining Use?
Crypto mining consumes a huge amount of energy. For instance, Bitcoin alone consumes about 130 terawatt-hours of electricity yearly, more than countries like Argentina, the Netherlands, and Norway. Other cryptocurrencies include Ethereum, which consumes a lot of energy, but they are working on an energy-efficient model, which is Ethereum 2.0.
Carbon Footprint of Cryptocurrency
What is a Carbon Footprint?
The carbon footprint is the total amount of greenhouse gases that enter the atmosphere because of human activities, usually measured in carbon dioxide (CO2) equivalent. A massive carbon footprint implies a significant portion of pollution, which causes climate change.
How Cryptocurrency Contributes to Carbon Emissions
When discussing “Environmental Impact,” the carbon footprint stands out as one of the biggest issues there. The bigger the amount of energy that crypto uses to mine, the more carbon dioxide is released into the atmosphere, especially when using “bad” sources of energy, such as coal and natural gas.
Most of the inputs of energy used for mining rely on fossil fuels, which add to global warming. This is a serious matter since the world already has trouble cutting back on carbon emissions and slowing down climate change.
Research has discovered that the annual carbon footprint of Bitcoin only is like that of the small country of New Zealand. This is scary because the carbon footprint of crypto mining is increasing with the rate at which there is a bigger demand.
How Cryptocurrency Affects Natural Resources
Resource Depletion: A Growing Concern
Apart from energy use and carbon footprint, crypto mining has other impacts on natural resources. Specialized hardware, for example, is needed in a mining operation: frequently, high-performance graphics cards and ASIC (Application-Specific Integrated Circuit) chips are needed which are made of rare metals like copper, gold, and aluminum. Extraction of these metals usually leads to environmental damage through habitat destruction and pollution.
On the other hand, as the demand for cryptocurrencies increases, so does that of these materials more or less accelerating the depletion of natural resources. This is another very important aspect of Environmental Impact.
Electronic Waste Due to Cryptocurrency Mining
Lastly, crypto mining also contributes to a massive amount of e-waste since mining equipment becomes obsolete in no time due to the rapidness of technological advancements. Whenever these devices malfunction or are no longer current, they are usually disposed of, which makes the issue of e-waste much worse.
E-waste is littered with toxins like mercury, lead, and cadmium that could otherwise poison water and soil. Such is more detrimental to the environment as presented by crypto
Strategy: Cryptocurrency Sustainability Efforts
Switching to Renewable Energies
While still very new, crypto awareness is forcing some miners to reduce their carbon footprint. The promising solution lies in renewable sources of energy. Cryptocurrency miners have begun several mines running on sun, wind, and hydroelectric power.
For instance, some of the Bitcoin miners have begun using geothermal energy in areas such as Canada and Iceland. This power is entirely renewable and low-emission. That alone can dramatically change the environmental implications of cryptocurrency mining.
Role of Ethereum 2.0
Another larger cryptocurrency is following suit and toning down its ecological footprint. It will change from a high-energy proof-of-work (PoW) system to a proof-of-stake (PoS) system on the platform. PoS systems don’t solve complex puzzles, thus saving a lot of energy. Ethereum 2.0 aims to reduce energy use by over 99%. This makes the cryptocurrency more earth-friendly.
Awareness and Action
What Can We Do to Make Cryptocurrency Friendlier to the Planet?
As consumers, investors, and participants in the crypto space, quite a lot can be done to make cryptocurrency more environmentally friendly:
1. Support Energy-Efficient Cryptocurrencies: Hunt for energy-efficient technologies or build upon sustainable platforms cryptocurrencies.
2. Invest in Renewable Energy: Promote cryptocurrency mining companies to use renewable energy sources by supporting such companies.
3. Energy Conservation: Be aware of the amount of energy used by your cryptocurrency transactions. Some platforms are already working on the finer details of making transactions more energy-efficient.
Conclusion: The Dark Side of Cryptocurrency: Environmental Impact shows that although many good things come out of cryptocurrency, serious environmental problems are generated. Energy consumption carbon emissions and resource depletion through mining and transactions harm the planet.
Still, despite increased awareness over enhancements like Ethereum 2.0 and transitioning towards renewable energy, it may be hoped that the crypto industry reduces its natural impact. Not to mention how people help push the growth of the cryptocurrency industry in a way that creates just conditions for the economy and the environment.
As the whole world shifts towards more sustainable technologies, crypto needs to shift. Only in this way will we be able to create a greener future for digital currencies.
Also Read: HODL: The Ultimate Guide To The ‘Hold On For Dear Life’ Cryptocurrency Strategy
