The power demands of cryptocurrencies are enormous. The manufacture of bitcoin, for example, requires specialized computers and has a carbon footprint similar to that of New Zealand, according to the most recent study by the Digiconomist, which tracks the environmental impact of digital currencies.
Ethereum, the second-largest cryptocurrency after bitcoin, has other environmental issues. It has a different structure from bitcoin and is \”mined\” using graphic processing units (GPUs) that are also used for video games and artificial intelligence applications.
Many argue that cryptocurrencies will have a positive environmental impact in the long run by incentivizing renewable energy production. But environmentalists say these claims are overblown, pointing out that most mining still relies on fossil fuel-based electricity in countries with lax environmental protections.
Another criticism is that cryptocurrencies can be used to anonymously finance terrorist groups or other criminal activities.
One way to make cryptocurrencies more environmentally friendly is to harness renewable energy sources like solar and wind power. The world\’s largest mining facility, located in Inner Mongolia, uses hydroelectricity from nearby dams to power its servers.
How do cryptocurrencies affect the environment?
There are several ways that cryptocurrencies affect the environment, both directly and indirectly.
The direct effect of cryptocurrencies on the environment is caused by the energy consumption required to mine them. A 2018 paper from the University of Hawaii calculated that Bitcoin mining uses up about 2.55 gigawatts of electricity per year, and that it’s currently responsible for about 0.21% of global electricity usage.
That’s more than entire countries like Ireland or New Zealand.
This has a significant impact on the environment because most cryptocurrency mining takes place in areas with cheap and dirty coal-powered electricity, like China or Eastern Europe, and it’s primarily powered by fossil fuels.
In September 2018, an electrical utility in Washington State banned cryptocurrency mining in their service area because they were concerned about power shortages due to increased demand from cryptocurrency miners, who were attracted by the state’s cheap hydroelectric power.
There are also indirect effects of cryptocurrencies on the environment. One is that some use cases for blockchain technology — a key component of cryptocurrencies — have led to better ecological practices in certain industries. For example, blockchain-based apps can allow retailers to trace food products back through the supply chain, which makes it easier to detect freshness problems
Such is the case of the environment, causing an imbalance and contributing to the destruction of the ozone layer, consuming incalculable levels of energy, giving way to awareness, and implementing strategies for the renewal and reduction of said levels, for the benefit of all the parts.
New forms and business models have caused a stir in the North American oil industry, such as the case of cryptocurrency miners who pay these companies for their natural gas.
Studies carried out by experts on the uses of energy express that there are very few mining companies (less than ten) of Bitcoin of great importance in North America that work with stranded natural gas.
One of the main ones is Kirkwood, EZ Blockchain who uses this kind of gas to make Bitcoin, giving it all to Kirkwood.
Solutions to mining Crypto without affecting the environment
One of the most common ways to mine crypto is through computers. But this has led to a major environmental crisis.
According to a report, mining Bitcoin alone consumes a massive amount of energy – equivalent to the total annual energy consumption of over 159 countries. Experts estimate that by 2020, Bitcoin mining will consume 0.5 percent of the world’s total electricity.
This has led many people to believe that cryptocurrencies are bad for the environment. But that isn’t necessarily true.
The technology powering cryptocurrencies is for good, but it’s the way we mine them that’s bad for our planet. Fortunately, there are solutions that can help us mine cryptocurrencies without hurting the environment further.
In this post, we will look at three innovative solutions that can help us mine crypto without harming the environment:
- Green Mining:
Current methods of mining crypto are highly energy-intensive and use a large number of fossil fuels that cause pollution. The primary reason for this is that miners usually have to travel all over the world looking for cheap electricity and landfills with free heat so they can reduce costs and maximize their profits.
This affects the global carbon footprint and causes greenhouse gases to be released into our atmosphere.
The Solution: The Green Protocol
The Green Protocol is a solution from the University of Luxembourg that is designed to help cryptocurrency miners reduce their energy consumption. The protocol works by simply changing the algorithm for Proof of Work that is used in most cryptocurrencies.
By altering the algorithm, the protocol can change the way in which miners compete to solve hash functions. This reduces their energy consumption. The project has been able to reduce energy consumption by up to 99% on selected cryptocurrencies like Ethereum and Bitcoin.
- Electricity generated from natural gas flaring (using Flare)
Natural gas flaring is a big problem globally as it contributes massively to greenhouse gases emissions. Flare is an initiative that seeks to capture this wasted natural gas and put it to use generating electricity for mining farms.
They have already made huge strides towards changing how mining farms operate in countries like Kazakhstan and Russia. If they are able to scale their operations, they could significantly reduce carbon emissions from mining farms around the world while also helping those countries get rid of the waste gases they produce. so you should choose the right Bitcoin exchange that support the use of renewable energy to mine crypto.
- Mining with Renewable Energy
The simplest and most obvious solution is to use renewable energy for mining instead of non-renewable one. Some miners are already doing it, and some countries have an abundance of renewable energy sources, like Iceland or Georgia with their cheap hydropower.
Other countries, like Sweden, Norway or Germany offer low-cost wind power. Still, not all miners can afford to set up a mining farm in these countries because of the high cost of electricity and housing in places like Iceland or Germany.
As cryptocurrencies become more popular, the demand for electricity will be growing as well. According to Morgan Stanley, Bitcoin may consume as much electricity by 2020 as Denmark does today. It’s worth noting that Denmark depends on renewables for about 50% of its electricity needs.
Using renewables is beneficial for both the environment and the bottom line. First of all, it reduces pollution and helps prevent climate change. Secondly, it saves money on electricity bills that now account for up to 70% of the cost of mining a single Bitcoin.
- More Efficient Hardware
Every cryptocurrency miner knows that both hardware costs and electricity bills need to go down in order to reduce overall operating costs.
One way to achieve this goal is by increasing hardware efficiency
Most industries, banks, financial companies, and individuals already use this form and business model in their investments and economic development projects, obtaining economic benefits and significant profits, providing personal satisfaction in terms of financial stability.
Today is the great concern of all human beings; achieving financial peace is the vision most desired worldwide by large and small merchants.
Miners are increasingly sending their rigs to the oil fields because it is one of the cheapest ways to get the energy they need. This indicates that while it is a waste of material for some, it is the source of energy necessary to drive the leading virtual economy in the world.