There is no denying that cryptocurrency uses significant amounts energy.
It powers machinery that validates transactions. This allows for the secure transfer, peer-to–peer, of billions of dollars worth of assets in a trustless and peer-to–peer fashion. Although the industry is not unusual in its energy consumption, it is an important aspect of businesses and individuals who are making more sustainable investments.
A 2021 surveyThe Australian ETF Market is an example. 28% of younger investors requested ethical investments. This is also reflective of global trends. Further back 2020 reportTriodos, an European-based ethical bank found that 61% want their investments to align with UN Sustainable Development Goals. 39% believed ethical investments are key to addressing climate change.
Although it is difficult to determine the exact energy consumption of cryptocurrency like Bitcoin, a recent open-source study from Galaxy Digital (2021).Bitcoin’s annual electricity consumption was estimated to be 113.89 TWh per hour worldwide. This report also found that the global banking system used 263.72 TWh of power per hour to get a sense of the magnitude of this.
This energy consumption is only going to increase as more people get involved in crypto and NFTs. However, it is encouraging that a growing percentage of the energy used by Bitcoin comes from renewable sources. A study on Bitcoin specifically shows that it is a good candidate for renewable energy. Cambridge University in 2020Estimated 76% of miners used some form of renewable energy, accounting for 39% of total Bitcoin energy consumption.
Renewables have the lowest incremental power generation costs. And cryptocurrency can be used to make new renewable initiatives financially viable by creating stable demand and consistent supply. Jesse Powell, Kraken CEO has said that in 2021, there will be a lot of demand for cryptocurrency. [Bitcoin is]This is a way of capturing a lot wasted and lost energy. It is a way to start up renewables. It’s doing a lot of good for the renewable energy industry.
Australia has many local mining companies that are innovative and focusing on renewable energy. Mawson Infrastructure Group, a NASDAQ listed company, develops modular mining solutions that can be co-located with renewable generation sites. Iris Energy is an ESG and renewables mining company that deploys global mining capacity.
We are also seeing climate-focused projects emerge in the space that are helping to raise awareness for environmental issues. Projects like SolarCoin, KlimaDAO, and PowerLedger offer people a way to support sustainability causes and contribute to the larger climate conversation.
Our marketplace offers Kraken access to cryptocurrencies that are generally accepted as running more sustainably, including assets that use proof of stake (PoS), which Frank Pallone, Chairman of House Energy and Commerce Committee, has approved. At a January US Congressional HearingCould use 99.99% more energy
Many digital assets, including Cardano and Solana, MakerDAO, Avalanche, MakerDAO, MakerDAO, MakerDAO, and Tezos, are already using PoS. Meanwhile, Ethereum, the second most popular ecosystem in the world, plans to switch from PoW to PoS. These are just a few options for individuals to make sustainable choices in this sector.
It is important to remember the cryptocurrency industry is still young. We can’t predict the future but we can be sure that the market will continue innovation and possibly adopt more sustainable systems.
The ultimate question of whether or non-cryptos energy consumption is worthwhile is if you believe that a digital cryptocurrency and store of value that can easily be used by anyone, regardless of their socioeconomic, geo-political or social status, is valuable to humankind.
SubscribeTo Rolling Stone magazine
SubscribeTo Rolling Stone magazine
