How bad is bitcoin for the environment? It uses more energy than Argentina.
The opinions expressed by entrepreneurs contributors are their own.
Cryptocurrency's failure is not just its plummeting financial losses over the past year, but also the devastating effects digital currency has had on our planet.
Why is it bad for the environment? Very simply, the amount of energy needed to power crypto puts millions of metric tons of carbon in the air. The worst cryptocurrency of all is Bitcoin, the original and greatest form of crypto.
To put some numbers into perspective, each Bitcoin transaction currently uses 1,201.34 kWh of electricity. This is equivalent to the average electricity consumption of a US household over 41.8 days. When you look at the figures for the energy required for Bitcoin mining in the last twelve months, that's more than the amount of energy Argentina consumes in a year, according to a study by the Cambridge Center for Alternative Finance.
The root of crypto's ecological damage comes from bitcoin mining, but it's not the type of mining you think of. Fossil fuel extraction involves heavy machinery, digging, a lot of physical labor and logistics. Bitcoin mining is as easy as turning on a computer server.
Ease of access can turn any mortal into a miner in minutes (and a few complex processing servers that cost thousands of dollars each).
Related: How a Savvy Entrepreneur Built the First Home Heater That Mines Bitcoin
Decentralized currency relies on its competing community to solve complex mathematical equations using a vast network of computer servers. Each server fights to find the solution first, but there can only be one winner. It's a race against time, with the server owner being rewarded in Bitcoin for each correct answer.
But the overall effect of this mining on carbon emissions is huge. According to reports, the production of Bitcoin emits almost half a ton of carbon dioxide during each transaction. This sheer volume of emissions alone would require the planting of 300 million trees to offset this amount of CO2.
It's no wonder that nine countries have banned the production of crypto. With China excluded, the United States became the first Bitcoin miner.
Related: Crypto's Stay in the Green
Many Bitcoin mining companies are taking over old coal-fired power plants that were in the throes of financial turmoil and using them to adverse effects, prompting Greenpeace to start campaigning for change . Kentucky crossed the finish line first as if it were a race for roses thanks to its tax incentives.
The bitcoin industry even has a marketing slogan. "Change The Code, Not The Climate" is an initiative launched earlier this year emphasizing that the world can still exist with cryptocurrency and a healthy climate.
What is the solution?Not all cryptocurrencies are a threat to the environment. For example, Ethereum, the second largest form of crypto, recently adopted a user-friendly mode of production. Moving away from Bitcoin's proof-of-work model, Ethereum's proof-of-stake production involves significantly less computing power, using just 0.02 kWh per transaction.
But as long as Bitcoin mining remains profitable, we need to implement initiatives that will also make it sustainable. Learning other currencies, such as Etherium, could be the solution...
The opinions expressed by entrepreneurs contributors are their own.
Cryptocurrency's failure is not just its plummeting financial losses over the past year, but also the devastating effects digital currency has had on our planet.
Why is it bad for the environment? Very simply, the amount of energy needed to power crypto puts millions of metric tons of carbon in the air. The worst cryptocurrency of all is Bitcoin, the original and greatest form of crypto.
To put some numbers into perspective, each Bitcoin transaction currently uses 1,201.34 kWh of electricity. This is equivalent to the average electricity consumption of a US household over 41.8 days. When you look at the figures for the energy required for Bitcoin mining in the last twelve months, that's more than the amount of energy Argentina consumes in a year, according to a study by the Cambridge Center for Alternative Finance.
The root of crypto's ecological damage comes from bitcoin mining, but it's not the type of mining you think of. Fossil fuel extraction involves heavy machinery, digging, a lot of physical labor and logistics. Bitcoin mining is as easy as turning on a computer server.
Ease of access can turn any mortal into a miner in minutes (and a few complex processing servers that cost thousands of dollars each).
Related: How a Savvy Entrepreneur Built the First Home Heater That Mines Bitcoin
Decentralized currency relies on its competing community to solve complex mathematical equations using a vast network of computer servers. Each server fights to find the solution first, but there can only be one winner. It's a race against time, with the server owner being rewarded in Bitcoin for each correct answer.
But the overall effect of this mining on carbon emissions is huge. According to reports, the production of Bitcoin emits almost half a ton of carbon dioxide during each transaction. This sheer volume of emissions alone would require the planting of 300 million trees to offset this amount of CO2.
It's no wonder that nine countries have banned the production of crypto. With China excluded, the United States became the first Bitcoin miner.
Related: Crypto's Stay in the Green
Many Bitcoin mining companies are taking over old coal-fired power plants that were in the throes of financial turmoil and using them to adverse effects, prompting Greenpeace to start campaigning for change . Kentucky crossed the finish line first as if it were a race for roses thanks to its tax incentives.
The bitcoin industry even has a marketing slogan. "Change The Code, Not The Climate" is an initiative launched earlier this year emphasizing that the world can still exist with cryptocurrency and a healthy climate.
What is the solution?Not all cryptocurrencies are a threat to the environment. For example, Ethereum, the second largest form of crypto, recently adopted a user-friendly mode of production. Moving away from Bitcoin's proof-of-work model, Ethereum's proof-of-stake production involves significantly less computing power, using just 0.02 kWh per transaction.
But as long as Bitcoin mining remains profitable, we need to implement initiatives that will also make it sustainable. Learning other currencies, such as Etherium, could be the solution...
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