In an update earlier today, global tech conglomerate Meta shared news of its latest moves surrounding digital collectibles. From September 29th, subsidiaries Facebook and Instagram will now allow users to link their virtual wallets with their accounts and also share non-fungible tokens. Users Across 100 Countries Can Access New Meta Feature Everyone on @instagram and @facebook can now share their digital collectibles in the US, and on Instagram in the previously announced 100+ countries,” Meta announced in a tweet. https://twitter.com/MetaNewsroom/status/1575486040349245446?s=20&t=TpIDHfYcRCtVRMNrwYhWiA…
There is a growing interest in the world of cryptocurrency mining. However, little is addressed on the influence that mining a digital currency has on the environment. A digital currency is an advanced exchange method that uses a decentralized P2P to record, produce, and send coins over the chain. Crypto mining has attracted more interest recently, particularly for cryptos that can be mined with graphic cards. Mining cryptos using graphic cards has resulted in increased demand, hence the skyrocketing mid-range card prices.
The mining method involves miners competing to solve complicated cryptographic computation algorithms via cryptographic validation. The first one to figure out the hash gets rewarded in cryptocurrency. This article will discuss the implications of this process on the environment.
Cryptocurrencies and Climate Change
Virtual currencies like Bitcoin and Ethereum are not like physical money that you would have in your wallet. However, virtual currencies have a real-life impact on the environment. The amount of power and energy it takes to feed cryptocurrencies contributes to the greenhouse gas that power plants emit to the atmosphere. According to Digiconomist, the Bitcoin network consumes more energy than various countries, including Austria, Switzerland, and the Czech Republic.
The enormous energy consumption of virtual currency does not shock environmental researchers and digital enthusiasts. However, putting numbers to the cost and harm done by cryptocurrencies is not a simple task for researchers. To get these numbers, a team of economic analysts at the University of New Mexico evaluated how much money all that energy use would cost.
According to the report, the team estimates that, in 2018, “each $1 of Bitcoin value made was responsible for $0.49 in health and climate damages in the United States.” This report indicates that the environmental damage brought about by making bitcoins costs 50% of Bitcoin itself in the last year.
Large amounts of electricity produced from burning fossil fuels and virtual currency mining are major contributing factors to the terrible air quality. This is caused by increased CO2 emissions that are impacting communities and families all over the nation.
Cryptocurrency Mining and Carbon Emissions
Virtual currencies like bitcoin provide unique services. However, humanity is decades behind the prevention of climate change. Bitcoin is among the cryptocurrencies that increasingly fails to evaluate the net impact it has on the climate.
Today, bitcoin transactions require the same amount of energy it takes to power more than five homes in the USA for a single day. As of now, the bitcoin network’s aggregate computing power is about 100,000 times larger than the world’s 500 fastest supercomputers put together. An estimated 31 terawatts per year is the total energy use of this web hardware, according to a study in 2018.
The network’s electric consumption, in turn, generates 17.3 megatons of carbon dioxide. More than 100 individual countries consume much less energy compared to the web hardware annually. China has the world’s largest bitcoin mines siphoning energy from renewable sources such as hydroelectric dams.
According to CoinShares, 77.6% of crypto mining operations are using electricity from renewable sources. The remaining 22.4% rely on nuclear producers and fossils. To avert the harmful effects of carbon emissions, miners should shift to the use of renewable energy.
Compared to fossil fuels, the renewable energy production model has noticeably fewer effects than fossil fuels on the environment.
Fossil Fuels and Digital Currencies
As demand for energy increases, fossil fuels is the easiest way to enhance the power grid’s potential output. However, this is likely to drain specific resources when getting additional natural gas or gathering coal.
Access to these resources can cause significant harm to the environment, for instance, using strip mining methods to access coal. This method takes away overlying rocks and soil and destroys plants, leaving the area unusable for a significant period.
Early Grid Enhancements
While enhancements to a power grid aren’t essentially an issue, they have an environmental effect. New electrical lines need resources to be made.
These enhancements will undoubtedly be unnecessary if cryptocurrency mining did not take place in particular urban areas. Having a more capable power grid may sound decent on the surface.
Nonetheless, if the improvements would be a requirement for cryptocurrency mining and not other growth areas, the picture would ultimately look different.
Cryptocurrency Mining and Electricity Consumption
According to an online tool known as the Cambridge Bitcoin Electricity Consumption Index (CBECI), the global Bitcoin network is consuming more than seven electricity gigawatts. Over a year, this amount is equivalent to 64 terawatt-hours of energy consumption. It is more than what a country like Switzerland uses over the same period.
Therefore, Bitcoin accounts for approximately 0.25 percent of the world’s total energy consumption. Bitcoin requires a tremendous amount of electricity that miners worldwide use to run computer hardware necessary to validate payments and maintain the network.
According to an estimate produced by the University of New Mexico, Bitcoin, Ethereum, Litecoin, and Monero, being the most mined cryptocurrencies, contribute an equivalent of 3 and 15 million tons of carbon dioxide between 2016 and mid-2018.
Having reliable electricity consumption estimates is rare; nonetheless, cryptocurrency’s electricity consumption is definitely concerning regardless of the exact figures. With this level of usage comes a significant carbon footprint.
Climate change estimates are based mainly on the emission of carbon dioxide stemming from electricity production. Emissions from electricity production are higher in China compared to the United States. Crypto damages contribute to 89% of China’s climate change, while in the USA, crypto damages amount to 60% of the total impact on the climate.
It is not clear whether cryptocurrency mining exercises will keep on expanding the overall power consumption. However, only a few million Bitcoin is left for mining, which could take years to finish. Additionally, different cryptocurrencies also require mining to release coins. This leaves room for other currencies to fill the void Bitcoin will leave behind.
Virtual currency mining could be a long-time issue for the environment. This depends heavily on the countries’ rules and regulations where mining will occur over the coming years. A decrease in cryptocurrency mining is highly unlikely, meaning the environment’s impact will likely keep growing.