Have you ever wondered if cryptocurrencies are actually harming your surroundings? The truth is that crypto mining does more harm to our environment than we could have imagined. This is one of the strongest allegations against this industry besides the original criticism of it being misused for illicit purposes.
Cryptocurrencies might have received a lot of flak during the initial days of their inception but things have changed dramatically over the years. Those who had earlier rejected crypto assets as tools being used only for criminal activities are now making a bee line for these themselves. The crypto industry is slowly but surely coming to be recognized as a legitimate industry. The question now remains is if our environment can handle its effects or not.
Most digital currencies have followed on the heels of the Bitcoin which was the first and most successful crypto coin to have entered the crypto space. Cryptocurrencies is also ruling the trading world. Bitcoin trading has got the potential to earn higher profits. Read the bitcoin trader 2021 reviews to know more. But Bitcoins are decentralized and as such, not linked to any bank. The new coins are instead generated through “mining”, an energy-intensive process whereby thousands of computers spread all over the world solve complex mathematical problems to earn the BTC as rewards. This system is supported by a disruptive blockchain technology that is essentially a distributed public ledger containing all records of transactions. Information on this blockchain is then shared amongst all computers/mining rigs/ nodes in a network.
All this sounds good on paper and advocates of cryptocurrencies argue that the advantages that digital currencies like Bitcoins offer compared to fiat currencies are plenty. But CNN reports suggest that mining for Bitcoins and other such digital coins needs a staggering quantity of power or electricity. In December 2017, this amounted to the use of 32 terawatts of power annually according to information provided by Bitcoin Energy Consumption Index. This is equal to running nearly 3 million homes in the US.
So, the biggest environmental impact of cryptocurrency is that need for such a huge amount of energy to sustain mining activities. As Bitcoin values go up, the mining levels increase and with it, the demands for power also increase.
This has brought about a link between fossil fuels and cryptocurrencies, a disturbing relationship that investors of crypto coins cannot afford to disregard. Bitcoin is actually hampering global efforts to move away from fossil fuels. Most Bitcoin mining operations occur in China because of cheap availability of power. Huge mining rigs have been installed in the country’s rural areas where land and power are relatively cheaper. Research shows that most of the electricity here comes from coal-based power plants. To give an idea, energy requirements of one Bitcoin mining rig in Mongolia were found to be the same as that needed for a Boeing 747 to fly. When coal is burnt, the harmful effects produced by release of carbon dioxide can lead to climate changes. So, all the hard work to achieve a low-energy and low-carbon economy is being threatened by crypto mining operations. Those in favor of mining are saying that environmental effects of Bitcoin mining are far less when compared to the environment impact of physical extraction processes for oil and natural resources. Some advocates are even suggesting the use of new tools and strategies that can make mining less reliant on energy. For instance, Hydro Miner is a company using renewable hydroelectric energy for mining.
To sum up, there is no definite right or wrong in this debate. While there is no denying that huge amount of energy is being used up for mining, at the same time, there is the belief that digital currencies will facilitate payment processing and solve inflation problems, thereby outweighing its harmful environment effects.