Bitcoin has always been the talk of the media since its sudden popularity and rise in value. At the start, bitcoin wasn’t something that was taken seriously until 2011 onwards where it kept increasing in value as more and more people invested in it. What was 10 cents per bitcoin is now $60,000 per bitcoin and this value is just going to increase in the near future where analysts predict it can even hit the $100,000 mark. This is the reason why many analysts singularly agree that bitcoin has been the most valuable and profitable asset in this decade.
Therefore it’s no surprise to anyone that bitcoin has such a large pool of investors that invest in it daily in hopes to gain profits in the future or to insure themselves against another economic crisis like the one Covid-19 brought. Investors who invested early in bitcoin bought it for hundreds of dollars and are millionaires now, and their stories are the motivation for today’s thousands of bitcoin traders. If you too want to join these investors in investing in bitcoin, you can click here to get started with your bitcoin investing journey.
However, bitcoin investing has brought several unseen consequences too. It has paled the profits and returns of other stocks like Forex, which if you click on this go url, you’d realize that it’s a pretty good stock investment, especially for beginners. The other unforeseen consequence of bitcoin has been its environmental effects.
If you aren’t aware of these environmental effects and want to know more about them and how they are caused by cryptocurrencies like bitcoin, then we have you covered. In this article, we’ll talk about whether bitcoin is good or bad for the environment, how so, and what bitcoin supporters have to say about it.
How does bitcoin affect the environment?
Bitcoin has literally revolutionized the world and we are not talking just about the global economy. Even if the entire bitcoin network is digital and all transactions still happen online, the raw power to process those transactions comes physically which is how bitcoin affects the real world as much as it affects the digital world. Miners are individuals who have large bitcoin mining systems or “rig farms” as they are popularly called. These systems are the ones that give you your bitcoin in each transaction.
Each bitcoin, or a part of bitcoin, you receive is mined from the blockchain blocks by solving numerous complex mathematical puzzles and complications within a bitcoin mining rig system. The mined bitcoins are sent to you with some being sent to the miner as well and the transaction is deemed complete. The problem arises with the energy consumption of these bitcoin mining machines.
Mining bitcoin requires tremendous amounts of power and electricity and it’s no joke how much electricity a bitcoin transaction can consume. Mining all cryptocurrencies requires 170 Terawatts of electricity each year, from which 120 Terawatts is the annual power consumption of bitcoin alone. This is a lot of electricity and since we still live in a world where most of our electricity comes from fossil fuels like coal, etc., having a global bitcoin operation of this scale can increase the number of carbon emissions substantially.
How bad is the damage caused by bitcoin mining?
120 Terawatts, the annual power consumption of Bitcoin according to the BBC, may not seem much at first glance on paper. However, to put it into perspective, 120 Terawatts is more than the annual power consumption of the entire country of Argentina and as much as the annual power consumption of Sweden. For a network that is entirely digital and decentralized to have this much power consumption truly makes things horrifying.
To add to this, many environmentalists claim that the sources of electricity that are supplied to the various bitcoin mining operations are not at all renewable sources of energy, like wind, solar or hydro energy, but instead non-renewable sources such as coal, oil, natural gas, etc. Environmentalists claim this because most bitcoin mining operations, about 65%, actually occur in China where the primary source of energy is coal. Another report claims that the carbon dioxide emissions by bitcoin mining amount to about 36 tonnes each year – the same amount of carbon emissions of two large European countries.
Another way cryptocurrency affects the environment is by depleting the supply of silicon used in semiconductors that are inside all bitcoin mining equipment. In recent years this shortage has caused major problems for other industries like the gaming industry. The problem with the e-waste generated by bitcoin mining is that it’s not recyclable or renewable and as such the thousands of tonnes of e-waste that bitcoin mining generates only contributes to the planet’s increasing environmental problems.
What do bitcoin supporters have to say about this?
Bitcoin supporters argue that the energy used for bitcoin mining comes majorly from renewable sources and dispute the claims that they do not. One study even claims that almost 75% of the bitcoin mining energy supply comes from renewable sources of energy, thus making it a pioneer for using such large amounts of renewable energy for vast operations. However, these claims are often considered as exaggerations or bluffs from individuals who don’t want the profits from mining operations to stop.
If a bitcoin supporter tries to argue that bitcoin will have lower power usage when the market crashes, environmentalists are quick to jump and argue with the supporter that at the current rate where bitcoin is constantly increasing in value, the electricity needed to process the same amount of transactions will increase as the value of bitcoin increases.
Efforts have also been made to incorporate several proof-of-stake blockchains, instead of bitcoin’s proof-of-work blockchains, into major cryptocurrency networks because they don’t require any form of mining for their transactions. This can be revolutionary if implemented into a cryptocurrency network as large as bitcoin but so far all endeavors to execute this plan have borne no fruits.
Whether Bitcoin uses renewable sources of energy or not, one fact is clear – if we don’t come up with a way to curb bitcoin mining’s energy requirement, it’ll have drastic effects in the future for all of us. We hope this article helped you understand the situation, and if it did, please consider following our website for regular updates as it will help us out immensely.