Bitcoin is the most talked about cryptocurrency. Bitcoin is still the most widely used currency and was the first to appear in the crypto-era. There is a dark side to Bitcoin. Bitcoin’s energy consumption is staggering. Each transaction consumes more energy that countries like Sweden and the Netherlands. These 8 facts will help you understand why Bitcoin is so harmful to the environment.
Cryptocurrencies can be used to trade or buy goods and services. Bitcoin is the most popular digital currency in the world and has triggered hundreds of other cryptocurrency launches. It is decentralised. This means that it operates without central control or oversight from banks or governments. Instead, it relies upon peer-to-peer technology for instant payments. Transactions are verified through high-powered computers by individuals called miners. A growing number of traditional finance firms are investing heavily into the Bitcoin market to take advantage of its benefits such as its accessibility and proven security. Despite its popularity, Bitcoin does have a negative side: it has a large carbon footprint. Here are 8 Bitcoin facts that will help you understand why this cryptocurrency is so bad.
1. The Value of Cryptos & Bitcoins Has Skyrocketed
In 2019, cryptocurrencies were a hot topic after Satoshi Nakamoto, a pseudonymous developer, launched Bitcoin, the first decentralised cryptocurrency. The total cryptocurrency market has grown to over $1.5 trillion since its inception. USD$3 Trillion. The Bitcoin price has reached an all-time high of $1,021 in 2021 all-time highOver USD$65,000 in value
Figure 1 Bitcoin Market Price in USD$ 2009-2022
2. It is a complex process to create Bitcoin
The process of mining, which involves solving mathematical puzzles, creates new bitcoins. These puzzles became more difficult due to increased competition for the cryptocurrency. It was impossible to solve them using normal computers (CPUs). ASIC systems are more efficient computers that miners use, and require much more electricity to operate. Bitcoin uses a software code called Proof of Work (PoW). This code requires large computer arrays to validate and protect the ever-growing amount of transactions around the world.
3. Bitcoin Data Centres can be expensive to run and are hugely expensive.
Bitcoins are created at massive data centers, commonly referred to as mining farm. These data centres are made up of thousands ASIC servers and can cost from a few hundred to thousands of dollars. About USD$10,000. These servers are often kept running incessantly because they are constantly mining for Bitcoins. It is vital to have large cooling systems in mining farm to prevent servers from overheating. However, this will significantly increase the electricity costs associated to running massive data centers.
4. Bitcoin Mining Requires Huge Availability of Electricity
Bitcoins consume huge amounts of energy. Each transaction consumes around 2,100 kilowatt-hoursIt is roughly equivalent to what the average US household consumes in a period of two months.
Additionally, Bitcoin mining uses an average of 91 terawatts-hoursAnnual electricity consumption, which is nearly seven times greater than the rate used to power Google search worldwide. 0.5% of the world’s electricity. Countries like Finland and Sweden, the Netherlands, Greece, and Sweden use approximately the same amount each year. As they struggle to manage the power-intensive process, crypto mining can also threaten the fragile energy grids. There are many cities in Iran, KazakhstanAlso, KosovoMany people have experienced long blackouts as a result of Bitcoin mining activities.
5. The Environmental Footprint of Bitcoins Is Concerning
According to estimates Bitcoin emits around 57 million tons annually of carbon dioxide, which is almost half a ton for each transaction. It would take planting to offset such high levels of carbon dioxide. 300 million trees. A 2018 study was also published in Nature Climate Change The idea that Bitcoin alone could propel the world to the next level in 16-22 years’ time was suggested by the 2 degree CelsiusTemperature threshold for climate catastrophe
6. Some Countries Ban Bitcoin or Cryptocurrencies
Nine countries currently have a Full banAlgeria, Bangladesh and China are the countries that have cryptocurrencies. Many governments used environmental concerns to justify their decision. However, many people believe these moves are necessary to protect their financial systems. Many operations relocated to the USA after China banned Bitcoin. KentuckyThe state that currently produces 18.7% of Bitcoin’s collective computing power for mining is second to New York’s 19.9%.
7. Most Bitcoin Farms Worldwide Rely On Fossil Fuels
Many countries have Bitcoin farms. Fossil fuels are heavily usedConcerns among environmentalists have been raised by the presence of such countries as Kazakhstan, Iran, or Kosovo. This already energy-intensive process has a higher environmental impact than countries that use renewable energy or nuclear energy. Bitcoin miners in the US are often called “Bitcoin miners”. Resurrect polluting coal-fired power plantsThese companies are at the brink of bankruptcy and are responsible for an enormous rise in emissions, as well as threatening a partial revival of coal in the country. Others are using fracked gases, another energy source responsible for heating the planet.
8. What alternatives do we have to Bitcoin? Are these better?
The short answer to that question is yes. There are many alternatives to the most well-known cryptocurrency in the world. Bitcoin uses 99% more electricity on average than other cryptos. A recent campaignGreenpeace launched the campaign with the slogan “Change the Code, Not the Climate”. A simple change to Bitcoins software code could dramatically decrease the amount of energy it needs to be created and used. It would not be the first instance of this happening. Ethereum, one of Bitcoins main rivals, recently announced its intention to do so. Transition to a less-energy-intensive codeIt has reduced its electricity consumption by 99.9% and dramatically reduced its impact on the environment.
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