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Nowadays, cryptocurrencies have various opinions, negative and positive. Critics very often point out a major drawback – digging cryptocurrencies is very energy-intensive. Like the mining industry, the cryptocurrency mining industry has serious environmental consequences as a result of the energy-intensive process by which cryptocurrencies are created. But unlike the mining industry, the cryptocurrency industry may begin to change the way it operates.
Cryptocurrencies' energy consumption.
There is no direct way to calculate how much energy is used to mine Bitcoin and cryptocurrencies, but the number can be estimated based on the hash rate of the network and the consumption by the mining platforms available on the market. For example, the Cambridge Bitcoin Electricity Consumption Index estimates that Bitcoin, the most widely mined cryptocurrency, consumed more than 85 terawatt hours (TWh) of electricity (0.38% of global electricity consumption). Other estimates from the Digiconomist website put the figure as high as 130 terawatt-hours based on energy consumption through July 2022. That translates to about 1,455 kilowatt-hours of electricity per transaction, the same amount of energy consumed by an average American household in about 50 days.
Ethereum, the second-largest cryptocurrency network, is estimated to consume 62.77 terawatt-hours of energy by July 2022, based on energy consumption. — will consume 62.77 terawatt hours of electricity per year. The average Ethereum transaction required 163 kilowatt-hours of electricity. However, since September 2022. Ethereum switched to PoS (Proof-of-Stake), the electricity demand has dropped to 0.01 TWh per year, with one transaction consuming 0.03 kWh. The reason Ethereum wanted to switch to PoS was precisely because of its energy efficiency.
Environmental impact of cryptocurrency mining.
Calculating the direct environmental impact is more complicated. Although fossil fuels are the main source of energy in most countries where cryptocurrencies are mined, miners must look for the cheapest sources of energy to remain profitable. Bitcoin and other proof-of-work cryptocurrencies require large amounts of energy – more than entire countries – to do the work of digging cryptocurrencies. The largest bitcoin mining country is the United States, which accounts for 37% of bitcoin mining.
Digiconomist estimates that the bitcoin network is responsible for about 73 million tons of carbon dioxide per year – as much as Turkmenistan generates, for example.
Based on data through September 2022. Ethereum generated an estimated 35.4 million tons of carbon dioxide emissions, before dropping to 0.01 million tons after the transition to PoS.
Most Bitcoin mining takes place in the US, China, and Kazakhstan.
Can cryptocurrency mining use less energy?
The proof-of-stake (PoS) method of validating cryptocurrency transactions and acquiring new cryptocurrencies is a good alternative. Other validation methods, such as Proof of history, are also being developed. It is puzzling that while Ethereum developers have phased out PoW, which allows a significant reduction in carbon emissions – there is no such plan in the Bitcoin community. It is believed that since Bitcoin is the most popular cryptocurrency, it must have a huge energy cost.
The conclusion is that some cryptocurrencies have high energy requirements, special hardware needs and generate a lot of waste. This means that they are not environmentally friendly. However, it is also important to keep in mind the environmental costs of accumulating natural resources and consuming energy and electricity to create and maintain fiat currency and our current banking system.
Translated and published with permission fromhttps://bithub.pl/wiadomosci/jaki-wplyw-ma-bitcoin-na-srodowisko/
