With the markets stuck in limbo, we should consider the wider impact that the falling price of Bitcoin has on society. Yes, investors are out of pocket. Cryptocurrency mining farms are closing and generally speaking, the industry on the whole is at a loss. Some however are finding some solace in the fact that as a result of all this (mainly the reduced need to mine Bitcoin) the negative price of Bitcoin is having a positive impact on the environment.
It’s no secret that mining Bitcoin is harmful to the environment. The sheer amount of energy needed to extract Bitcoin from the blockchain uses an awful lot of power. In many cases, Bitcoin has been accused of using more power than small countries such as Ireland. Overall, the way mining operates is actually ludacris when you think about it. Part of the problem within the current markets is that because the price of Bitcoin is down, it takes EVEN MORE power to mine a enough Bitcoin for it to be worthwhile. Mining $100.00 worth of Bitcoin takes longer to mine when Bitcoin is valued at $3,500.00, than it does when Bitcoin is valued at $10,000.00, that’s simple mathematics.
However, the cost of energy is still the same, and so is the cost of the mining equipment, therefore the profit margins shrink.
The result of this, people are forced to stop mining?
This, then has a positive impact on the environment.
This isn’t the end of cryptocurrency mining, of course it isn’t. When Bitcoin moves back up, mining operations will start to generate profits and energy use will surge. This ‘downtime’ however is a great time for companies to start looking are alternative energy solutions that will save them money (in the long run) and also reduce the carbon footprint of Bitcoin. Simply put, with mining on hold, those that do mine Bitcoin are able to reassess their operations in order to make them more environmentally friendly and thus, futureproof. By using greener energy sources like wind and solar, mining firms will eventually save money. Yes, it costs a lot to set up a solar rig, but in the end, it pays dividends.
The falling price of Bitcoin is bad news generally, however, it’s pretty good for the planet and the environment. Hopefully as I have said, this downtime does encourage those interested in mining to innovate a little, so that when the price of Bitcoin starts to fly again, the planet doesn’t have to take such a big hit.