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What is the Environmental Impact of Cryptocurrency :

What is the Environmental Impact of Cryptocurrency :

Cryptocurrency has become a popular phenomenon of the 21st Century. It has been a household name since its inception in 2009 as an established idea. As we all know, cryptocurrency is now a household name thanks to the growth of Bitcoin and other cryptocurrency alternatives called Altcoin.

Because of the attraction it commands, a lot of people invest in cryptocurrency day after day.

Whether you are a trader or an investor, cryptocurrency is growing each year due to the influx of investment. According to Investopedia cryptocurrencies have grown in popularity due to the ideals they promote of decentralization and potentially huge gains.

Their volatility is still high and these assets are more at risk than traditional assets. In 2017, Bitcoin prices rose to $1000, then jumped to $19,000, before plummeting to $3000. Bitcoin prices rose again in 2020, reaching new highs around $60,000, before falling to $30,000 in 2021.

Decentralization

Cryptocurrency’s structural decentralization is a major reason why many find it worthy of their investment, commitment, and time. What are we really trying to convey when we say that the cryptocurrency has decentralized structures?

We will say that it is regulated by an authority. The government is not the one who controls transactions on the Blockchain network. The essence of cryptocurrency is that it is a currency that has been established to be used as a medium for exchange.

It uses cryptography for the verification, authentication, privacy, and security of transactions. Cryptography makes it easier to encode simple information that can be retrieved with a key. The cryptocurrency blockchain is a public, open ledger that can be verified by different nodes. It is therefore easy to trace the origins of transactions between unknown accounts.

In this article, we will examine the potential environmental impacts that cryptocurrency could have. Undoubtedly, cryptocurrency has a tremendous influence on many parts of the world. It has hugely affected human society’s technological, financial, and economic segments.

Bitcoins were worth $1 at the beginning of 2011, when it was just $1. It reached an all-time high of $48,000 in 2011. This is a huge opportunity for cryptocurrency traders and investors to grow in the coming years, as long as it continues.

However, cryptocurrency’s overwhelming popularity has its boomerang effect or impact on climate change.  Many people are unaware of the immense amount of energy that cryptocurrency consumes. Inadvertently, it is true that only a small percentage of the world’s population are aware of the devastating effects of cryptocurrency energy consumption on the environment.

Cryptocurrencies are the result of hard work in mining. What is cryptocurrency mining?

What is it? Crypto Mining?

Crypto enthusiasts suggest that around 50% of people are aware that cryptocurrencies can be generated by mining. However, many people are not aware of what crypto mining is. These people may be aware of what crypto mining is, but they may not realize that it is more than just creating new coins.

Cryptocurrency mining involves the verification of blockchain proceedings by particularized nodes and computers for a particular cryptocoin. It also involves joining them to a blockchain. One of the major benefits of crypto mining is that it prevents double spending of virtual currency on distributed networks. 

What are the consequences of Crypto Mining?

Due to the rigorous nature of crypto mining, crypto mining consumes a lot of energy. However, the high consumption of energy can have a negative impact on the environment. It takes a lot of energy to mine cryptocurrency. Most times, compared to mining for physical gold, the designed platform for cryptocurrency – proof of work (PoW) requires a huge load of energy. It consumes a lot of electricity to run hardware, which is also expensive. 

See Also

The advantages of cryptocurrency over centralized currencies are being promoted by cryptocurrency advocates. The blockchain web functions independently of any trusted intermediary, such as the central banking. Because of its decentralized, systematic functionality, it uses a lot of computational power to maintain and control the security of cryptocurrency network. 

Carbon Dioxide and Mining

Digiconomist estimates that Bitcoin mining produces approximately 96 million tons annually of carbon dioxide emissions. This is equal to the amount produced by smaller countries. More than 47 million tons of carbon dioxide are produced annually by mining for Ethereum.

Carbon dioxide can cause serious harm to the planet and other living organisms. Carbon dioxide is a natural byproduct of life. However, it also plays an important role during the growth cycle of vegetables. However, too many carbon dioxide molecules in the atmosphere trap heat from sunlight, leading to an increase of temperatures on Earth.

Scientists claim that if humanity doesn’t find a solution to its carbon dioxide production, the plant will continue to be threatened with an ever-present uncertainty. If cryptocurrency is charged with excess carbon dioxide release, it will be a huge problem because it is the world’s largest carbon dioxide supplier.

According to a University of Cambridge analysis, bitcoin mining consumes 121.36 Terawatt-hours per year. It is greater than the combined consumption of these companies: FacebookMicrosoft, Apple and Google. This is because the blockchain’s computational process ensures that energy consumption will not drop anytime soon.

Cambridge University says that only 39% of the energy comes from renewable sources. The majority of these are hydropower and other forms of hydropower. These can have detrimental effects on ecosystems and biodiversity.

Final Thoughts

It is expensive to process the blockchain network decentralized system. However, it is the most secure and reliable method of preventing any kind of hacker or breach. It isIt seemsIts disadvantage is that it can lead to the extinction of Costa Rica and the entire world if it is not used properly.

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