The Discussion Throws Light On What's The Environmental Impact Of Cryptocurrency? – Part 1
In two posts we discuss the environmental influence of the crypto. It is a curious combination as we decipher the secret association of fossil fuels and digital currencies. Read on
The First Post On Environmental Impact
Coming a long way from their relatively obscure origins, cryptocurrencies have the mainstream financial world which was once disdained digital currencies as the tools for criminals, terrorists, or rebellious individuals frustrated with traditional money as the industry has made significant progress in establishing itself as a legitimate and potentially world-changing space. Hereby it was found that growing massively in unit value, user bases, and daily transaction volumes digital currencies like Bitcoin and ether have paved the way as dozens of new cryptocurrencies have followed in their path. While cryptocurrency is not without its detractors, it is said that many skeptics continue to argue that space is a speculative bubble ready to burst anytime. Therefore, the type of criticism that has gotten as much notice is however the one having to do with the environmental impact of digital currencies.
Nodes, Mining And More From Crypto Mining
The earliest cryptocurrency to gain widespread adoption and success is bitcoin where most digital currencies follow the model and as a decentralized token, bitcoin just doesn’t remain linked to a central bank whereas new bitcoins are generated through a process known as mining in which computers around the wold solve complicated mathematical problems, earning in BTC as a reward. Hereby the entire system then supported by and base on the blockchain a technology acting as a distributed digital ledger to record all past transactions with information on the blockchain coming to be shared among the nodes of the network or those individual computers and mining rigs all around the world.
The argument by adherents of the cryptocurrency is the concept offering numerous advantages over fiat money due to their complicated, anonymized setups which is however according to a report by the CNN that the process of mining BTC as well as the other digital currencies is requiring a staggering amount of energy and according to data by the Bitcoin Energy Consumption Index, published by Digiconomist the cryptocurrencies analysis site run on a voluntary best effort basis.
This is where the amount of energy could power roughly 3 million households in the US as the BTC may offer advantages over traditional means of transactions requiring far more energy than Visa Inc being used for the billions of Visa card transactions each year equivalent to the power used by just 50,000 US homes according to the website.
The one concern about bitcoin and other digital currencies is that they tend to require more and more energy according to environmentalists as they become more popular and as their value increases. For example, in the case of bitcoin, the mathematical puzzles miners are required to solve to receive a BTC reward therefor gets increasingly difficult as the price value of the coin goes up meaning that they also require more computing power and in turn more energy.
How Are Fossil Fuels And Digital Currencies Related?
In a way that many investors have yet to acknowledge all of this has combined to link cryptocurrencies with fossil fuels whereas meteorologist Eric Holthaus argues that the bitcoin is showing the effort to achieve a rapid transition away from fossil fuels. the fact that much of the bitcoin mining taking place today happens in China as the teams of miners have set up massive rig operations in the rural areas in which land and electricity are inexpensive.
Thereafter researchers at the University of Cambridge have indicated that much of the used electricity in mining operations has come from inefficient coal-based power plants that are constructed in rural areas of the country in advance of large construction projects many of which never materialized and as a reference point it was quoted in a recent report that the energy demands of a single bitcoin mining project in Inner Mongolia were the same are those required to fly a Boeing 747.
The Discussion To Be Continued
Hereby it is found that the burning of coal and other fossil fuels is currently a major source of electricity worldwide both for cryptocurrency mining operations and a host of other areas. Thereby it is the burning coal which is a significant contributor to climate change as a result of the carbon dioxide that the process produces. Indicating that the opinion of Glen Brand from a report by CBS News the director of a Sierra Club chapter in Maine has the bitcoin and digital currencies as the progress they are making toward moving to a low energy low carbon economy.