When you look at the world as a whole, there are so many different factors that impact the environment. But did you think that cryptocurrency can have an impact on the environment? Yes, mining has an impact on the environment.
A very high amount of electricity is used for the mining process of cryptocurrencies. While many people are trying to invest in cryptocurrencies and become millionaires, they are also investing in electronic waste. Visit bitcoin smarter for more information on bitcoin trading
If you have never come across this point in the past and don’t have any idea about how cryptocurrency can affect the environment, then this blog can be helpful. Here we have discussed how it impacts and also if it contributes to the changes in the climate.
Let us get started:
For validating any transaction that happened through the cryptocurrency platform, you will need high electricity. Also, not just validating transactions but also for the creation of new tokens electricity is required. If you check the most popular cryptocurrency Bitcoin, it consumes almost 123 Terawatt Hours of electricity. This is per one year and is very high compared to what the United Arab Emirates or the Netherlands uses per year.
For the creation of just one block of Bitcoin, more than 2000 kilowatt-hours are required. It is equal to 72 days of power consumption for an American household on average.
The story repeats with Ethereum as well. Per year, Ethereum uses 100 Terawatt Hours of electricity. Almost 220 Kilowatt-hours are required for the creation of one Ethereum block. It is equal to 7 and a half days of power consumption for an American household on average.
This number is not fixed as the amount of mining will increase in the future. It is not restricted to a particular number per year. Also, there are so many cryptocurrencies available in the crypto market and every coin follows the same process of mining for creating new coins. As the number of people adopting cryptocurrency increases, the process of mining will get more complicated. That means, more electricity is required for it.
Why is it required?
You should stop looking at the energy consumption as a bug. It is one of the features of any cryptocurrency that uses electricity for the mining process. Any cryptocurrency that works on Proof-of-work will use electricity for mining, just like the physical mining of Gold. The miners will need high technology hardware for the mining process. And to make sure that the hardware runs properly, electricity is required.
Its impact on the environment:
Now comes the main point that we should understand, its impact on the environment. The amount of carbon dioxide that is produced due to the mining process is very huge. Bitcoin alone produces almost 90 plus million tons of carbon dioxide every year. When it comes to Ethereum, it produces 45 plus million tons. So, it is almost equal to what a small country can produce as a whole in a year.
Most of the mining of Bitcoin is done in the USA, which is equal to 37 percent. They depend on Fossil fuels for the production of electricity.
Along with this, electronic waste is also produced in huge amounts due to the mining process. The hardware that is used for mining becomes obsolete in just no time. That is all dumped into the environment again. Bitcoin alone generates 30,000 tons of electronic waste in one year.
Can it use less energy?
Usually, the process of mining happens in those places where the energy is cheaper, abundant, and reliable as well. But when it comes to generating new coins and validating transactions, it need not have to be based on electricity alone.
One of the best alternatives is the Proof-of-stake method. You can use PoS for validating the transactions and also for minting new coins. They use very little computer power. There are many other methods for reducing energy consumption for mining and transaction validation. Taking some simple measures can help in reducing the amount of energy required for mining cryptocurrencies. But the electronic waste is something to be worked upon to reduce the impact of cryptocurrency on the environment. Protecting the environment is very important to make sure that we pass a green planet to the next generations.