Crypto woes: cryptocurrency and climate change, from coal to e-waste
At this point, most people have probably泭heard of Bitcoin. But unless you've purchased cryptocurrency yourself, you may have a lot of questions about how it all works.
Cryptocurrency uses blockchain technology to verify transactions. A blockchain is a list of records linked together through cryptography. Because of the way that the blockchain works, the data and transaction records are resistant to tampering and therefore can function as verifiable currency.泭The same way that you can tell if a dollar is counterfeit by checking for the security thread, watermarks, color-shifting ink泭and microprinting, one can verify that a Bitcoin is legitimate through its blockchain records.
Bitcoins are created through a process known as mining.泭According to泭, Bitcoin mining is an essential component of the network's system for arriving at consensus as to the current state of the ledger. In order to mine Bitcoin, extreme computing power is required in order to create new blocks in the blockchain updating the state of the ledger. Bitcoins security protocols are what make the currency so secure.
Unfortunately, the computing power required to mine coins is astronomical. According to泭, the network uses 121 Terawatt-hours of electricity every year...more than the entire country of Argentina. A recent study done by the University of Cambridge found that coal accounts for about 40% of miner power.泭According to NBC, a study in the 2019 Joule scientific journal found that Bitcoin production is estimated to generate between 22 and 22.9 million metric tons of carbon dioxide emissions a year. That's equivalent to the output of 2.7 billion homes.泭The energy needs of mining Bitcoins will only increase over time because Bitcoin is a finite resource.
Until泭recently, most mining (over 60%) has taken place in China. However, China has recently attempted to dissuade Bitcoin mining because of泭its carbon footprint. Unfortunately,泭miners will likely try to泭move泭operations to other countries. More widespread mining regulations could prevent this from happening. The energy requirements of cryptocurrencies like Bitcoin are unsustainable and pose great threats to the future of the environment.
The hardware used on mining farms has its own泭environmental impacts: between 8,000 and泭12,000 tons of unrecyclable circuits, or e-waste, is generated per year. On top of that, hardware within泭the mining farm needs to be cooled. According to Columbia Climate School, one plant in New York draws up to 139 million gallons of fresh water...each day to cool the plant, and discharges it some 30 to 50簞 F hotter than the lakes average temperature, endangering the lakes wildlife and ecology.
Tesla announced in May that they would泭, after purchasing in February泭a large amount of crypto to use for future projects. This represents a large shift in public awareness towards recognizing the various impacts of cryptocurrency on the environment.
Bitcoins biggest competitor, Ethereum, is . The switch to Ethereum 2.0 will be seamless and transformative. Ethereum will be able to cut its environmental impact as a result of泭a shift泭from Bitcoins proof of work mining model and towards a new innovative proof of stake validation process. According to泭, as of Nov.泭29, 2021, the switch to Ethereum 2.0 is in the finalization stage.
Many other泭lesser-known cryptocurrencies exist, and they hope to break into the ever-growing crypto market with an emphasis on sustainability that rivals Bitcoin and Ethereum. One of those is Cardano, created by the co-founder of Ethereum.泭Cardano has the ability to process 1,000 transactions per second, compared to Bitcoins 7. Cardano has the泭泭in the cryptocurrency market. It has slowly been adopted by a few other platforms, including NFT marketplaces, and with the growing popularity of泭NFT this could mean great things for the future of the currency. Cardano does all of this on the basis of sustainable, proof-of-stake technology, which makes it one of the most popular green cryptocurrencies today.
Other green cryptocurrencies include:
Nano (NANO): has one of the lowest carbon footprints
Stellar (XLM): used by IBM, Nigeria, France and India
SolarCoin (SLR): gives users SolarCoins in return for using solar energy
These coins are just the tip of the iceberg. The future of cryptocurrency looks promising, especially with increasing emphasis on sustainability.泭