The cryptocurrency market is booming, and it isn’t slowing down. With prices reaching $600 billion, digital currencies are becoming more valuable by the day. However, this “boom” now has a cost: an environmental one.
In 2009, Bitcoin was created as a peer-to-peer electronic cash system that cuts out financial institutions as middlemen in transactions. While its popularity has increased over the years, so too have its carbon emissions. Mining cryptocurrency requires a lot of computing power and electricity use- both of which come from fossil fuels. In fact, according to a report from Reuters on November 19th 2017, Bitcoin mining already consumes more energy than some small countries do!
This blog will explore the carbon footprint of digital currency and why cryptocurrency supporters should care about their impact on the environment.
The Cryptocurrency Carbon Footprint: Why Crypto-Supporters Should Care.
The cryptocurrency market is booming, and it isn’t slowing down. With prices reaching $600 billion, digital currencies are becoming more valuable by the day. However, this “boom” now has a cost: an environmental one.
In 2009, Bitcoin was created as a peer-to-peer electronic cash system that cuts out financial institutions as middlemen in transactions. While its popularity has increased over the years, so too have its carbon emissions. Mining cryptocurrency requires a lot of computing power and electricity use- both of which come from fossil fuels. In fact, according to a report from Reuters on November 19th 2017, Bitcoin mining already consumes more energy than some small countries do!
The carbon footprint of cryptocurrency
There are many arguments about the environmental impact of cryptocurrency. Critics say that mining digital currencies like Bitcoin is bad for the environment. However, there are also arguments in favor of digital currency. One argument in favor is that the price to mine digital currencies will go down as more people use it. Another argument is that because digital currencies can be mined using renewable energy sources, they are not as harmful to the environment as critics claim.
How does digital currency compare to other currencies?
Digital currencies emit more greenhouse gas emissions than many countries. For example, according to the report from Reuters on November 19th 2017, Bitcoin mining already consumes more energy than some small countries do! A single transaction can use up as much electricity as an average household in the Netherlands uses in a month.
Traditional cash is also not without environmental costs. Banknotes are made of cotton linen or paper, which requires raw materials and water to produce- both of which affect the environment.
Differences between traditional cash and digital currencies are not just limited to the carbon footprint. Traditional cash doesn’t require constant updates and computer resources- which could be beneficial for people with limited access to technology. On the other hand, digital currencies don’t have any physical form that can be counterfeited or stolen- making them safer than traditional cash for merchants and users alike.
How can you lessen the environmental impact of cryptocurrency?
The key to lowering the environmental impact of cryptocurrency is to make it more efficient. The process of mining Bitcoin, for example, is an extremely energy-intensive procedure. It requires up to 1,700 kilowatt hours (KWh) of electricity per Bitcoin transaction.
However, there are ways that you can lessen the environmental impact of cryptocurrency. You can use renewable sources like solar or hydro power which emit zero carbon emissions - this would provide a sustainable solution.
Another option is to regulate the energy consumption for cryptocurrency mining by limiting its usage in future technologies. This way, it will be easier for us to find cheaper and more environmentally friendly resources when mining digital currencies.
Although cryptocurrency has become increasingly popular, so too has its negative impacts on the environment. If we want digital currencies to continue thriving without damaging our environment, we need to start making changes now - before it's too late!
Conclusion
Cryptocurrency is a new type of currency made from computer code. It’s the next stage of digital currency and it’s quickly becoming a global phenomenon. This is largely because cryptocurrency is a decentralized currency, meaning that it’s not regulated by any government or central bank. Cryptocurrency is a peer-to-peer transaction that cuts out the middleman, which also cuts down on transaction costs.
But as cryptocurrency becomes more popular, more concerns have been raised about its environmental impact. Mining for cryptocurrency requires a lot of electricity and computer power. And as more people start mining, the power demands will only increase. While it’s still unclear how much of an impact cryptocurrency will have on the environment, it’s important for the crypto-community to make an effort to lessen its footprint.
