In the bubble of dispute and uncertainty that floats around cryptocurrency in recent times, little is said about the impact the mining and production of cryptocurrency is having on the environment.
The production of mining cryptocurrency is quite perplexing, but the premise of it can be described quite simply, take Bitcoin for example, users who wish to mine for Bitcoin must solve puzzles. The puzzles, are part of a network of pending Bitcoin transactions that are verified through the solution of these puzzles, in return, the user is paid a transaction fee through which new Bitcoins are generated. Often, these puzzles require immense computing power, across huge networks of computers all working together to mine the Bitcoins.
According to Digiconimist, in 2017, the estimated power consumption associated with Bitcoins exceeded 30TWh (terawatt hours), this level is higher than the total energy consumption of Ireland, and 19 other European countries - not only does the network use an awful lot of electricity, the majority of the power it produces is generated by coal- fired power stations, ultimately giving Bitcoin a carbon footprint similar to the footprint of King Kong (absolutely massive)!
Experts expect this trend to continue, as Bitcoin (and other cryptocurrencies) grow, the power consumption of their networks is predicted to continue increasing, by January 2019, Digiconimist expects Bitcoin to reach 125TWh, 4 times greater than the figures from 2017.
These shocking statistics have however motivated a change in how other cryptocurrencies are being developed. Climatecoin for example, claims to be “the first carbon zero cryptocurrency in the world”. It is a platform through which companies can trade renewable energy, abolishing the need to directly pay for energy from the grid, instead, it allows responsible companies to source energy from other responsible companies. Climatecoin uses a similar format to Bitcoin however the process is simplified, making it accessible to more users and, more importantly, making it for more energy efficient.
Overall, the cryptocurrency market is looking to provide a secure method for trading, purchasing and storing money, yet I believe it’s environmental impact is still overlooked. Making the networks more energy efficient will be the next steps in ensuring the markets are less damaging to the environment, hopefully the rise of currencies like Climatecoin will inspire a change and guide all of these carbon powered coins into a cleaner, smarter and more sustainable future.
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