Introduction

Cryptocurrencies, although new to the world, have evolved over the years into an industry that has impacted the entire world. The introduction of cryptocurrencies as a medium of exchange, allowing people to have complete control over their assets and wealth, is, in a sense, a threat to our traditional centralized banks. Despite massive growth in the digital industry, there have been some concerns about the environmental impact of cryptocurrency mining.

Facts about mining

The computers used to mine cryptocurrency must be powerful enough to solve complex math problems, but too complex to be solved manually. The number of bitcoins issued is halved every four years, which over time makes the currency more valuable, but more expensive and more durable for miners, which affects its energy consumption. 

If you are considering the mining process, for example, mining bitcoin requires a lot more energy than producing billions of Visa cards. The energy required to mine BTC is equal to the energy required to launch a Boeing 747.

Another issue is related to ASIC devices, e-waste that becomes obsolete after two years and cannot be used for any purpose other than mining. Until now, the method of burning coal and fossil fuels has been used to generate electricity. However, burning coal has had a significant impact on climate change. On the other hand, if we consider traditional banking systems, the energy supplied by the utilities is sufficient to carry out all the necessary operations. It follows from this analysis that traditional banking systems do not consume as much energy as cryptocurrencies.

Statistics

According to the analytical platform Digiconomist, the amount of electricity required for mining is comparable to what an entire country consumes in a year. Mining generates 36.95 megatons of carbon dioxide per year, roughly the same as in New Zealand. The carbon dioxide emissions that accompany electricity production, in turn, increase the greenhouse effect on the planet.

What studies say about mining

Bitcoin mining and its connection to the environment is a topic of global university interest. Cambridge conducted a study in which they found the amount of energy that is spent each year to generate the cryptocurrency. The results showed that even some countries use less electricity per year. The mining equipment is very powerful, so it wastes a lot of energy. The researchers found that the number of terawatt-hours for mining is about 121.36. Even Argentina and the Netherlands use less electricity per year than goes into mining bitcoin. Norway came close to cryptocurrency in terms of energy consumption. Bitcoin proponents claim that mining is increasingly using electricity from renewable sources because it is becoming cheaper and uses much less energy than other sources.

However, despite the put forward reasons why cryptocurrency mining is harmful to the environment, these claims have been counter-analyzed. Miners have highlighted new strategies to reduce the dependence of mining operations on massive amounts of energy. We cannot conclude to a large extent that cryptocurrencies have a negative effect on the environment. Just as it was mentioned earlier, electricity is one of the setbacks of cryptocurrency that has found a mode for equilibrium. The fact that there are miners and the great financial benefits which come with crypto mining does not cloud the miner’s sense of judgment. That is why miners will always locate countries where electricity is comparably cheap thus reducing the impact it will have on the entire public.

Network performance

To determine the exact power consumption of cryptocurrencies, the researchers used interviews and surveys and performed calculations based on network performance. Digiconomists also rely on the amount of electricity bills. Determining the number of greenhouse gas emissions from the production of cryptocurrencies is not entirely easy, given that their amount changes daily and cannot be tracked. In conclusion, despite these points, the effectiveness of cryptocurrency payments and their ability to help people avoid inflation outweighs their environmental performance. The issue raised about the harmful nature of the mining process to the environment, miners have resorted to going to open space far away from the population in order to avoid mishaps.