Environmental Impact: Crypto Mining | Metaverse Post

by IvanVad

Published: June 14, 2024 at 9:41 am Updated: June 14, 2024 at 9:41 am

by Victor Dey

Edited and fact-checked:
June 14, 2024 at 9:41 am

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The cryptocurrency craze has brought both fortune and controversy, and we can see questions like “What are the ethical implications of cryptocurrency?” and “Is Bitcoin mining bad?” Some people have made significant wealth from speculative digital currency exchanges, while others are raising concerns about the significant environmental damage and carbon imprint of cryptocurrencies. The environmental consequences of mining Bitcoin and other cryptocurrencies are coming under closer examination as big financial firms like Fidelity Investments enter the crypto. 

This is why Metaverse Post wants to analyze the mining industry in this article. To help you get to understand the dispute necessitates dissecting the operation of cryptocurrencies such as Bitcoin and the reasons for their extreme power thirst. . Here’s a breakdown of the key issues around crypto’s negative environmental effects on networks of exchange and potential solutions:

A decentralized network protected by a massive amount of processing power underpins the Bitcoin operating system. In a process known as mining, powerful computers all over the globe compete to solve incredibly difficult cryptographic riddles in order to validate transactions and produce new Bitcoin tokens. 

However, this “proof of work” method uses a tremendous amount of electricity as more and more Bitcoin mining rigs compete round the clock in energy-intensive computations. The arithmetic problems get tougher as more miners join the frenzy. It fuels an endless desire for more computer power and electricity.

Though estimates differ, the Bitcoin network is said to now use more than 120 terawatt hours of power annually—more than some countries combined. The amount of greenhouse gases released by all that energy is comparable to the emissions of several developing nations. Critics denounce this computational arms race as cryptocurrencies do nothing useful to society, someone says, but simply waste finite resources to produce purely speculative digital tokens.

One of the most outspoken opponents of cryptocurrency’s negative environmental effects, Rolf Skar of Greenpeace USA, declared that Bitcoin is bad for the environment and stressed that this is a reality, not just an opinion. According to the organization, nearly 60 million tons of CO2 emissions are presently produced annually by Bitcoin mining facilities worldwide.

Is Blockchain Bad for the Environment?

According to some projections, 39% of the power used worldwide in PoW mining activities comes from sources that are sustainable. Most of mining operations have inked deals with renewable energy producers to support new green power projects and use excess energy for cryptocurrency.

Still, the fact remains that the majority of crypto mining is not environmentally friendly and relies heavily on carbon-emitting fossil fuels like coal and natural gas as cheap sources of electricity. According to current studies, over 90% of the environmental impact, power usage, and electronic waste of the global Bitcoin network come from nations including China, the US, Kazakhstan, Russia, and Iran. Prior to the current administration’s ban on mining, China alone may have created over 40 million tons of CO2 emissions.

Concerns have also been raised over the enormous water footprint of cryptocurrency and its use of scarce freshwater resources in drought-stricken locations. An estimated 1.65 cubic kilometers of water are used annually by the Bitcoin network, which is sufficient to supply drinking water to more than 300 million people. The worldwide water shortage problems caused by climate change may make cryptocurrency’s thirst more and more unsustainable.

Another significant problem is the waste that is routinely dumped into local habitats and landfills from abandoned mining rigs. In order to stay competitive on the network, the specialized computers must function at maximum efficiency, which produces a significant quantity of wasted electronic waste.

Code Modification Might Reduce Crypto Emissions

Environmental organizations like Greenpeace are putting pressure on financial corporations that mine cryptocurrency, such as Fidelity Investments, to use their influence to force a change in Bitcoin from proof of work to proof of stake, because the code for the platform is open-source. They contend that by making just one alteration to the core code, Bitcoin could become more environmentally friendly and energy efficient by over 99%.

Yet it could be very challenging, if not impossible, to get the numerous independent miners, developers, and stakeholders to agree on such a drastic alteration to the foundation of the Bitcoin protocol. There is also strong resistance in the cryptocurrency community to changing Bitcoin’s proof-of-work model.

What Environmental Costs are Associated With Mining?

If updating Bitcoin’s protocol proves too difficult, another option is to shift focus to supporting the most sustainable cryptocurrencies that were engineered to be more eco-friendly crypto from the start.

Ethereum is one prominent example of an alternative proof-of-stake-based blockchain that consumes just a tiny fraction of the power compared to Bitcoin for less environmental impact. Solana, Algorand, and other “green” crypto are also designed to minimize electricity consumption and emissions through mechanisms like proof of history algorithms for mining.

As worries about sustainability and the environment grow, several experts in the cryptocurrency space predict that the market will naturally direct investment and traffic toward these lower-energy options. If Bitcoin’s energy profile keeps getting worse, investors and consumers may eventually turn away from it, which would put financial pressure on miners to either modernize or give up on the outdated technology.

Still, with its established market domination and broad acceptance, unseating Bitcoin as the leading and most valued cryptocurrency is an enormous challenge. It will be very difficult to unseat Bitcoin due to its distributed effects, flexibility, accessibility, and first-mover advantage, even though emerging blockchains could provide more environmentally friendly options.