Crypto & the Environment: Is Mining Causing the Severity of Climate Change?

crypto and environment

Due to the easy and quick accessibility of cryptocurrency, people are mindlessly investing in it without knowing the kind of effects it has on the environment. Crypto mining requires an intensive amount of energy as the advancement of mining rigs and their accuracy use more energy than before.

To begin with, mining rigs’ graphics cards are always in operation. That consumes a lot more energy than simply exploring the web. While processing, a three GPU system can draw a minimum of a thousand watts of power, which is the same as switching on a medium-sized air conditioner.

Why Does Mining Require Energy?

Energy consumption is a feature of mining, not a fault. Bitcoin works on the blockchain which is a public ledger that isn’t associated with any banks. What basically happens is that in order to obtain credits, traders are required to solve complex mathematical equations in minimum time. The one who solves the code first will receive the credits.

To make the process faster with minimum errors and more precision, traders use heavy equipment and extensive mining rigs so they get to solve the problem first and bag in more credit. But these types of equipment use massive amounts of energy which causes increased electricity usage and more wasted resources.

Switching to online brokers might reduce the cost like it does when we carpool. The mining is happening but on a shared scale so that the adverse effect lessens. You can register on apps like bitcoin 360 ai and join an online broker with a small investment.

Impact on the Environment

It is complex to analyze the carbon impact of cryptocurrencies. Fossil fuels are the main source of energy consumption in the vast majority of the countries where cryptocurrencies are actively minted but traders must seek alternate energy sources to remain profitable.

According to Digiconomist, Turkmenistan produces the same amount of carbon dioxide per year as the Bitcoin network or around 73 million tons.

According to data up until September 2022, Ethereum generated an estimated 35.4 million tons of carbon dioxide emissions before switching to proof of work, when those emissions decreased to 0.01 million tons.

Can Mining be Eco-Friendly?

When mining is done on larger scales, they are often shifted to places where the energy required is less expensive, found in vast quantities, and is from a reliable source. The mining of crypto or minting of new coins doesn’t always have to acquire large amounts of energy.

Proof-of-Stake POS is a method where crypto can be authenticated and new coins can be minted without using extensive power. Instead, the power to validate transactions and operate the crypto network is predicated on the number of bitcoins that a validator has saved or has made a pact to not trade or sell.

Ending Statement

Cryptocurrencies need energy-intensive types of equipment to perform the processes quickly and in an accurate manner. Some are not ecologically friendly in that sense; nonetheless, it is crucial to consider the environmental costs of harvesting natural resources and consuming energy and power to create and sustain fiat currency and our present banking system. 

As the process of authentication requires huge amounts of energy, has high competition, and grants the user commission, there is a very low chance that energy wastage might get reduced by mining. Even on the day, the last Bitcoin is given away, its transactions and other processes will still consume energy.

The views expressed in this article are those of the authors and do not necessarily reflect the views or policies of The World Financial Review.