Is cryptocurrency bad for the environment?

[Karl_BC]

Hello everybody!

The world of digital assets stems from the act of crypto mining wherein ‘miners’ solve complex mathematical problems to add blocks of transactional information to the blockchain. They are rewarded with bitcoin and other cryptocurrencies as an incentive for maintaining the network. However, to do all this, miners consume significant amounts of energy that lead to environmental concerns.

As more people take interest in the world of cryptocurrency and how it works, the demand for crypto mining increases as well.
What type of impact does this have on the environment in terms of energy consumption? Let’s find out.

How does crypto mining work?

To understand the effect of cryptocurrency on the environment, you should first know how crypto mining works. Here’s a step by step guide on how the mining process works:

Step 1 - Verifying transactions using nodes

There are two ways to mine cryptocurrency: using your own hardware or software or through a cloud mining service. Miners first verify the transactions using nodes to make sure they are legitimate, then they move on to the next step.

Step 2- Creating a new block of data

The next step is when blocks are added to the blockchain. When the transactions have been verified, these are added into a block of data where they can no longer be altered or changed.

Step 3 - Additional information and hashes are added

Hashing or using mathematical processes takes place next. When the new blocks of data have been added, hashes and other information are included. To generate the hashes that will serve as each block’s ‘fingerprint’, miners verify or solve mathematical problems to complete the process.

Step 4 - Verification

Once the new hash is verified by all members of the network through a consensus, the block is then successfully added to the blockchain. The miner who was able to solve the problem first will then receive a set amount of cryptocurrency as a reward.

Why does crypto mining require so much energy?

The process of mining demands large energy consumption, reaching up to 120 Terawatt hours every year, which is equivalent to around 1% of the world’s energy consumption.

Experts have compared this level of energy consumption to the likes of small countries like Greece, Argentina and Chile who use fewer amounts of power annually. But why exactly does crypto mining require so much energy?

Cryptocurrency blockchains are public and decentralised so the upkeep of the entire network is left in the hands of its community that consists of computers all over the world. Part of this community are miners who play a huge role in ensuring that the network is secured and immutable. To do this, they use high-powered mining equipment that consumes a lot of energy.

The environmental impact of cryptocurrencies

With the mainstream adoption of cryptocurrency, it’s important to understand the impact of crypto mining on the environment. One of the biggest effects it has on nature is carbon emissions. Due to crypto or bitcoin mining, the amount of carbon emissions on the planet has increased by 40 million tons just over the course of two years.

E-waste is also another result of crypto mining. As crypto becomes more in-demand, miners will have to upgrade their hardware to make the mining process more effective. Over time, the outdated machines are turned into e-waste that is considered useless and non-recyclable.

Overall, e-waste and carbon emissions both affect climate change. This means that they contribute to the breaking of the ozone layer that results in global warming and other environmental concerns.

The future between cryptocurrencies and the environment

The next step to take for most cryptocurrencies is to go with more sustainable options. If miners use renewable energy instead of fossil fuels, this could turn the situation around for the better.

The carbon footprint of crypto mining would decrease dramatically if it weren’t for the ‘proof of work’ process since it requires all miners in the network to solve cryptographic problems, which means expending a ton of energy.

In fact, there are now cryptocurrencies that don't require mining at all. Some of the more sustainable options like Cardano, Ethereum and Bitgreen use ‘proof of stake’ to validate their transactions. In the proof of stake process, only validators that have ‘staked’ their coins or have already processed transactions can verify transactions and be incentivised.

There are other steps being taken to mine cryptocurrency quickly and use less energy while doing so. For example, the government in El Salvador has recently adopted Bitcoin as their legal currency on June 9, 2021. These are mined using the energy from nearby active volcanoes to promote a more sustainable process.

When other digital assets follow in these footsteps, it will lead the world of crypto to a more eco-friendly future wherein cryptocurrencies and mother nature can co-exist peacefully.

Thanks for reading and waiting for your comments.

Cheers,
Karl


Source: Bitcasino blog

[Alcor]

Well, a good overview of the topic raised. States and their governments will use both the topic of the total significant energy consumption of cryptocurrency in mining, and the quality of the energy used, that is, carbon emissions in this case. Bitcoin is likely to get the most, because it is unlikely to switch to a proof of stake algorithm.

[debra]

Not every cryptocurrency needs mining. SO, it may not be for all cryptocurrencies.
And about mining, it becomes the old issues that are always praised by the countries or people against crypto.
We know that the energy consumption of crypto mining is high, but when it is compared to other consumption, crypto is not even bigger.

We must see from two sides, crypto may have some lacks. But, see how crypto can really make people have better life, have income while this very hard life situation during a pandemic. and other benefits.

[MrSpasybo]

It is true that the POW system consumes a lot of energy, and this is a weakness that bears often use to criticize Bitcoin. However, by comparison, the gold mining industry & traditional banking system consume a lot more energy than Bitcoin, while not providing much value and utility to the economy.
POS has become the current popular and optimal solution to reduce the amount of energy required to maintain the network. Crypto will no longer be weak in energy and environment.

[TomPluz]

People who don't like Bitcoin or cryptocurrency can always cite the energy demand by its mining and has been a big issue in those countries that now don't want anything to do with Bitcoin. However, we have to understand that all industries whether you like or not are consuming power. At the same time, we already know that a significant number of mining operations are using green, renewable energy and with the pressure coming from different sectors am sure more and more miners would be opting to consume green energy.

[Fenix]

So far, we see that any human activity that consumes energy, in any case, at least partially damages the environment. Cryptocurrency is just among the list of activities that consume energy. However, it is no more harmful than others.
However, the issue of energy consumption by cryptocurrency has been raised and it will be used by states and their governments to tighten its regulation. It would be nice for the cryptocurrency to move from proof-of-work algorithm to other, less energy-intensive ones.

[hugo_uzman]

energy consumption from the crypto mining industry is quite a very small portion compared to the other mining industry like gold mining and other precious metal mining and the eco waste is quite manageable since all parts are recyclable-friendly and also let's consider this that google, Microsoft, and amazons data centers consume more power than the entire usage of crypto mining hardware all around the world.

[TomPluz]

energy consumption from the crypto mining industry is quite a very small portion compared to the other mining industry like gold mining and other precious metal mining and the eco waste is quite manageable since all parts are recyclable-friendly and also let's consider this that google, Microsoft, and amazons data centers consume more power than the entire usage of crypto mining hardware all around the world.

As expected, enemies of the crypto industry will always use any available means inorder to discredit the use of the new money. And since all the data in this industry is open to the public since we are very transparent it has been the focus of some people. There is no sniggle industry that is not using power...all of us are. And we are now in the process of transitioning to the use of green power...and in El Salvador soon there will be Bitcoin mining using power from the volcano which is also clean and sustainable. Eventually, the industry can find acceptable solutions.

[zilzylian]

Good topic,Bitcoin has a high selling price because of the difficult level of mining with hardware that is worth hundreds to thousands of dollars, therefore altcoins try to use POS and POSA systems to reduce the electrical energy required, actually miners have many options to use alternatives electrical energy is needed and I think miners are slowly making electricity generators that are friendly to the environment such as wind and solar power plants

[Senin]

States and their governments will always use the topic of high energy consumption and environmental damage when mining cryptocurrency, and at the same time, Bitcoin will apparently get the most, since it is unlikely that it will be able to switch from the PoW algorithm to another, with less energy consumption.
Now ethereum is very advantageous in this regard, the network of which in May-June of next year should switch to the PoS algorithm.

[TomPluz]

It is true that the POW system consumes a lot of energy, and this is a weakness that bears often use to criticize Bitcoin. However, by comparison, the gold mining industry & traditional banking system consume a lot more energy than Bitcoin, while not providing much value and utility to the economy. POS has become the current popular and optimal solution to reduce the amount of energy required to maintain the network. Crypto will no longer be weak in energy and environment.

I think this is the big point not always taken by people who are anti-Bitcoin. There are far more other industries that consume more power than Bitcoin yet we allow them to have a pass because they are already there and can not be remove anymore. Sometimes I feel that these people are really unfair to Bitcoin. Now, having said that, there is now a move to sequester wasted energy that will just be released to the environment and have them be utilized by Bitcoin mining...aside from using green, renewable energy just like what we just see that started in El Salvador using geothermal power. The thing is that if there is a big demand for something, there will eventually be providers for it.

[tervel]

Bitcoin’s bad impact on the environment is not only about the amount of energy it consumes.The type of energy used also matters. Particularly when we’re speaking of polluting, non-renewable energy, as is the case with most of the energy used in the Bitcoin network.

[gurunanakji777]

You teach us in a very easy and in a very simple language. I really like the details you provided and I came to know how it all works exactly. The concern is genuine and it can impact many of us. I believe miners will take this thing seriously and gradually they will move to renewable energy that is environment friendly and it will not cause any harm. If all miners move to renewable energy that would be a worldwide appreciable step.

[satpol_PP]

It is true that the POW system consumes a lot of energy, and this is a weakness that bears often use to criticize Bitcoin. However, by comparison, the gold mining industry & traditional banking system consume a lot more energy than Bitcoin, while not providing much value and utility to the economy. POS has become the current popular and optimal solution to reduce the amount of energy required to maintain the network. Crypto will no longer be weak in energy and environment.

I think this is the big point not always taken by people who are anti-Bitcoin. There are far more other industries that consume more power than Bitcoin yet we allow them to have a pass because they are already there and can not be remove anymore. Sometimes I feel that these people are really unfair to Bitcoin. Now, having said that, there is now a move to sequester wasted energy that will just be released to the environment and have them be utilized by Bitcoin mining...aside from using green, renewable energy just like what we just see that started in El Salvador using geothermal power. The thing is that if there is a big demand for something, there will eventually be providers for it.

Yes, I agree . I think It's opinion from anti bitcoin and crypto currency.
I also heard about bitcoin mining is bad for environment, But I think It's good for my wallet, of course my income.

[Jaephoenix]

Yeah, crypto is bad for the environment. Elon Musk apparently ditched bitcoin just because of that reason.   But there are new projects that are geared towards mining via green energy.