How Cryptocurrency effects the environment?
I first learned about bitcoin years back. A coworker was casually telling me about it as we rode the elevator 4 stories. I recall he mentioned a coin was about $100 - $200 each. I thought that was a lot of money already and by the time we reached our floor, I dismissed it altogether. What was I thinking?!
Bitcoin started to make headlines in 2017 when one coin became worth $10,000. At least, that’s when I started to pay attention. Soon after it hit a high of $19,000. Can you imagine being one of those lucky few who invested early and with faith became millionaires?
Since I was drawn into the hype, I fell into an obsession of checking prices daily. It never occurred to me what environmental effects cryptocurrency could have until someone mentioned that mining bitcoin consumes a lot of electricity. So how impactful is cryptocurrency mining on the environment? And how much power does it consume?
Why does cryptocurrency mining require a lot of electricity?
Each digital transaction needs to be validated. That's where mining comes in. It's the process of validating transactions and posting it to the public ledger, known as the blockchain. Once a transaction is complete, more digital tokens are introduced into the network.
Computers “mine” for cryptocurrencies by solving complex mathematical problems. As a result, these computers need to consume more energy when compared to the average PC user. In order to mine faster for profit, people have their own data centers full of these devices.
Cryptocurrency mining consumes around 48.82 terawatts of energy each year. To put things into perspective, bitcoin can power 4,494,437 homes in the US. That's insane! And that number continues to increase as more players enter the cryptocurrency game. In fact on January 1, 2018, the bitcoin energy consumption was estimated at 36.80 TWh per year. That's quite a jump in 44 days.
And this only the beginning. As more cryptocurrencies like Etherium, Ripple and Bitcoin Cash grow in popularity, it’s harder for computers to mine adequately. As a result, more power is needed to complete the entire process, then things get complicated.
Most bitcoin is mined in China at this time, and it’s actually fueling major environmental concerns since most of the energy comes from inefficient power plants powered by coal. Digiconomist estimate that as of today, 310.75 kg CO2 emissions are produced for each transaction. That means a single bitcoin transaction is about the equivalent of driving a car for 12.07 hours non-stop.
Initially, people thought that mining cryptocurrencies would be something simple and efficient. But that’s not the case. The current hardware requires a lot of energy, but let's hope that future mining hardware may be able to diminish the necessary amount of energy consumed per unit.
What can we do?
The best thing we can do is to start using renewable energy for powering the cryptocurrency mining facilities. This isn’t polluting the environment at such an alarming rate, so the results are rather good this way. Plus, the specialized equipment used for mining needs to be energy efficient. While there is a shift in this direction, it’s certainly not there yet, and that’s a shame for the time being.
Unfortunately, serious miners won’t cut down their efforts to save the planet. They're making a fortune in profits, even if they have to invest a lot of money in equipment and energy fees. Most people wouldn't pass up the chance to make millions to preserve the environment, even though they should.
The environment needs our help, and we have to do all in our power to protect it adequately. If we want to have a healthy planet, we need to make sure that all energy is used efficiently. Let's raise awareness and be energy conscious while we transition to renewable energy sources.