Cryptocurrency, also known as “cryptocurrency”, is often referred to simply ascryptoCryptography is used to secure transactions.
Cryptocurrencies are extremely popular because they do not have a central issuing and regulating authority. Instead, they use decentralised systems to record transactions and issue new units.
They have experienced a surge in popularity and volatility in the last few years. However, environmental consequences have been brought into question.
What is cryptocurrency mining? And why does it have such an enormous carbon footprint?
Cryptocurrency mining involves the creation of new cryptocurrency units through solving complex puzzles.
Critics claim that the process is unsustainable because it requires a lot of computing equipment and is very energy-intensive.
According to the Cambridge Center for Alternative FinanceThis mining uses about 110 Terawatt Hours (or 0.55 percent) of the world’s total energy production.
The centre estimates that a single cryptocurrency transaction uses the equivalent amount of energy that an American household uses in a month. This is equivalent to Sweden’s global energy consumption.
According to reports, the majority of Bitcoin is mined and processed in China.
Researchers at the University of Cambridge claim that almost two-thirds of Bitcoin generation in April 2020 was in China. One-third of that was in Xinjiang.
Even Elon Musk, a crypto enthusiast has raised the alarm. He tweeted in May: We are concerned by the rapidly increasing use fossil fuels for Bitcoin mining and transactions, particularly coal, which emits the most harmful emissions of any fuel.
We believe cryptocurrency is a great idea on many levels. However, this cannot be achieved at a high price. environmentHe said so.
Are regulators cracking down?
In May New YorkThe state proposed a bill to stop crypto mining until its environmental impact has been assessed. It claims that this will take three years.
Senator Joseph A. Sullivan introduced the New York State Senate bill. Kevin ParkerThis would require a study of the greenhouse gas emissions from Cryptocurrency miningIts effects on wildlife, air, water and the environment. In the meantime, mining would not be permitted.
Cryptocurrency mining is a threat to not only New York’s climate goals under the CLCPA but also global energy policy such as the Paris Agreement. Senate Bill S6486 says.
Accordingly, there will be an immediate three-year moratorium on cryptocurrency mining centers within the state. This includes those located in converted fossil fuel power stations.
Can crypto be mined ethically
High energy consumption does not necessarily mean high greenhouse gases emissions. According to the Harvard Business ReviewThe carbon footprint of Bitcoin miningIt really depends on what energy sources are used.
Bitcoin miners have adopted renewable energy often because it is cheaper.
Iceland is an example of a cryptocurrency mining hub. Its cheap geothermal energy, cold climate, and cooling ability make it a great place to mine cryptocurrency.
In the meantime, miners are attracted to hydropower resources in Canada, Quebec, and British Columbia as well as windpower in Texas.
For cryptocurrency mining, miners have even resurrected abandoned hydroelectric plants from the US.