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Cryptocurrencies were introduced last 2009 and have disrupted the world ever since. These digital currencies started when Satoshi Nakamoto created Bitcoin, and different other cryptocurrencies have emerged after that. At present, these currencies are one of the most valuable assets globally and are predicted to continue thriving in the future.

The debate- is it good or bad for the environment?

Due to the massive growth of cryptocurrencies, particularly Bitcoin and Ethereum, skeptics and environmentalists have started questioning their effect on the environment. Bitcoin and Ethereum use an enormous amount of energy for mining, or the process of verifying the transaction of two users and adding it to a blockchain public ledger. Mining is energy-extensive because the computers used need to be high-powered for it to be able to solve complex mathematical algorithms. That is why some say that cryptocurrencies are causing increased carbon emissions and climate change. Some studies have even shown that Bitcoin’s annual energy consumption is higher compared to some countries.

However, the University of Cambridge research says 76% of miners used electricity from renewable sources last 2020. CoinDesk, the leading news site specializing in digital currencies, says that it is not right to compare Bitcoin’s energy consumption with an entire country since it would not be apples to apples. Bitcoin is not even a county. In addition, countries with mining operations take only 1.29% of the country’s whole power consumption.

Bitcoin Mining encourages renewable energy.

Bitcoin mining encourages the use and development of renewable energy as it rewards the most efficient miners. Miners get the most profit when they get the most number of hashes or computations per kilowatt of electricity. That is why miners use solar energy and hydroelectric energy, as these are the cheapest ways to produce electricity.

This way of mining also motivates others to find new ways of generating renewable energy. Recently, Philip Hughes Farm in the UK has been using cow manure to produce electricity and power crypto mining computers. Now, he can generate Ethereum. Who knows what else people will be able to discover as a sustainable and renewable way of mining in the future?

Cryptocurrencies have a much smaller carbon footprint than traditional financial systems.

Since cryptocurrencies are digital, it saves more energy as compared to running a traditional financial system. On the other hand, Fiat currency needs resources to print money, allocate it correctly, prevent fraud and counterfeit, and even manage it properly. It also requires a third-party entity to store and transact it like banks and ATMs. Indeed, fiat currency has a higher carbon footprint than cryptocurrencies.

Many sustainable cryptocurrencies are emerging.

New cryptocurrencies continue to develop, and these are sustainable ones. For example, Solarcoin uses a unique approach wherein it incentivizes the use of solar energy. There is also Bitgreen, Nano, and Cardano, which use more energy-efficient technology.

In conclusion

Cryptocurrencies are here to stay. As with all things in the world, it undoubtedly impacts the environment. However, contrary to popular belief, these digital currencies do good to Mother Nature too.

About The Author:

Katreena is a scientist and a life hack specialist. She’s authored scientific journals on biotechnology and molecular biology. To take a break from scientific journals, she puts her mind into writing about lifestyle, health, and sustainability. She strongly believes that kindness makes the world go round.