Cryptocurrencies are famously bad for the environment… but is there a way we can do better?
A study titled “Revisiting Bitcoin’s Carbon Footprint” showed how Bitcoin could be responsible for 65.4 megatons of carbon emissions annually, which is about the same amount as the entire country of Greece.
China’s crackdown on Bitcoin mining hasn’t entirely made the dent in these numbers it was expected to, mainly since it was later found that mining in China never stopped. Simply put, no amount of restriction will make a difference. Bitcoin was created to resist regulation and censorship, so even if a country banned mining, it wouldn’t stop individuals from building mining rigs in their homes.
High energy consumption
The high energy consumption of the mining process is not a flaw; it’s a feature. Bitcoin mining is the process of validating token transactions without the intervention of third parties. This validation process uses large amounts of energy, using the computational power of thousands of mining machines.
This entire process used to be possible with home computers, but mining hardware has evolved since the early 2000s, giving rise to Application-Specific Integrated Circuits, chips solely made for mining Bitcoin. These machines constantly run, causing vast amounts of consumption close to the energy used by countries like the Netherlands or Chile.
Miners buy the electricity they use, most often generated from fossil fuels. Burning those fuels emit greenhouse gases which warm the Earth’s climate and cause pollution that harms human health.
The issue doesn’t end there. Competition among miners drives up energy use, and as Bitcoin’s value climbs higher, that competition gets fiercer.
As of May 2021, computers in the Bitcoin-mining network made 180 quintillion guesses per second, and each BTC token sold for $36,000 that month before climbing to $57,000 in December 2021. With incentives like these, it’s no wonder that miners are constantly working on mining more cryptocurrency.
Energy usage – by the numbers
According to the University of Cambridge Electricity Consumption Index, by June 2022, the global Bitcoin network needed 14.34 gigawatts of electricity generation, which is enough to power nearly 14.4 million American households. That is roughly 126 Terawatt-hours (TWh). If we take an average of 10.6 cents per kWh, it amounts to approximately $13.4 billion. In addition, energy consumption for mining hit an all-time high at the…
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